Which of the following may tend to keep dividends low?
I.a state law restricting dividends in excess of retained earnings
II.a term contained in bond indenture agreements
III.the desire to maintain constant dividends over time
IV.flotation costs

Question

Quizplus · Accepted Answer

All the options listed can contribute to keeping dividends low: state laws may restrict dividends to protect creditors, bond indentures may have covenants limiting dividends, companies may aim for stable dividends, and flotation costs can reduce available funds for dividends.

Which of the Following May Tend to Keep Dividends Low