Which of the following are NOT legitimate constraints on the dividends a firm will pay to shareholders?
A) Dividends must not eat into legal capital.
B) Bondholders may have covenants limiting the amount of the dividend.
C) Dividends may be constrained by the amount of cash a firm has.
D) All are legitimate constraints on the dividends that firms choose to pay to shareholders.
Correct Answer:
Verified
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