How may a reduction in cash dividends be in the best interests of current shareholders? The firm

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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 answer-question

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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Posted Date: Feb 06, 2024 03:40 AM

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How may a reduction in cash dividends be in the best interests of current shareholders? The firm

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Foundations of Financial Management

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