The capital impairment restrictions are established to
A. reduce dividends equal to or below the current earnings level.
B. constrain the firm to paying dividends which do not require additional borrowing.
C. protect the shareholder.
D. provide a sufficient base to protect creditors’ claims.
Answer:D
The capital impairment restrictions are established to
A. reduce dividends equal to or below the current earnings level. B. constrain the firm to paying dividends which do not require additional borrowing. C. protect the shareholder. D. provide a sufficient base to protect creditors’ claims.