Why do loss-making companies still pay a dividend? A) The tax benefits exceed the loss incurred in paying the dividend. B) Managers want to signal that the decline in earnings is temporary and that positive earnings are expected in the future. C) Managers realise that reduced dividends will result in lower staff motivation. D) Managers want to signal that the decline in earnings is permanent and shareholders should take their profits.

Why do loss-making companies still pay a dividend? A) The tax benefits exceed the loss incurred in paying the dividend. B) Managers want to signal that the decline in earnings is temporary and that positive earnings are expected in the future. C) Managers realise that reduced dividends will result in lower staff motivation. D) Managers want to signal that the decline in earnings is permanent and shareholders should take their profits.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 12QTD

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