Describe the types of limitations firms can face from legal restrictions on dividend payments.
Answer to relevant QuestionsThe board of directors of Kensington Enterprises has decided to pay cash dividends totaling $ 5 million in the first quarter of the year. This payment represents the initiation of a cash dividend for the first time in ...What would be the probable effect on a firm’s cash position of the following events? a. Rapidly rising sales b. A delay in the payment of payables c. A more liberal credit policy on sales (to the firm’s customers) d. ...Lewis Printing has projected its sales for the first 8 months of 2014 as follows: Lewis collects 20 percent of its sales in the month of the sale, 50 percent in the month following the sale, and the remaining 30 percent 2 ...Fishing Charter Inc. estimates that it invests $ 0.30 in assets for each dollar of new sales. However, $ 0.05 in profits are produced by each dollar of additional sales, of which $ 0.01 can be reinvested in the firm. If ...Explain what is meant by the statement “The use of current liabilities as opposed to long-term debt subjects the firm to a greater risk of illiquidity.”
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