How may a reduction in cash dividends be in the best interests of current shareholders? The firm
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Question:
How may a reduction in cash dividends be in the best interests of current shareholders?
The firm will have available cash to increase current investment and future profits.
A reduction of cash dividends is always in the best interests of current shareholders.
A reduction of cash dividends cannot be in the best interests of current shareholders.
Reduced dividends increase managerial compensation, thus increasing managers' motivation.
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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