Which two of the following tend to limit the amount of dividends that can be paid by a leveraged corporation?
I.current tax laws
II.corporate tax rates
III.bond trust deed covenant
IV.laws pertaining to retained earnings

Question

Quizplus · Accepted Answer

Corporate tax rates and current tax laws do not directly limit the amount of dividends that can be paid by a leveraged corporation. However, bond trust deed covenants and laws pertaining to retained earnings typically restrict the amount of dividends that can be paid to shareholders. Therefore, the correct answer is III and IV only.

Which Two of the Following Tend to Limit the Amount