During a recession,companies with a significant portion of their capital structure in the form of common share equity (i.e.,low leverage) often struggle to provide a continuous stream of dividend income to their shareholders.

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Companies with low leverage (i.e.,high equity) are more likely to have a strong financial position and be able to maintain dividend payments during a recession. On the other hand, companies with high leverage (i.e.,low equity) may struggle to meet their debt obligations and may need to suspend or cut their dividend payments.

During a Recession,companies with a Significant Portion of Their Capital