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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

Would it ever be rational for a form to barrow money in order to pay cash dividends? Explain.

Summary Introduction

To explain: Is it rational for the firm to pay its cash dividend from borrowed money.

Introduction:

Cash dividend:

The dividend is generally paid out by the company of its net earnings while the cash dividend is an amount paid to the stockholder’s outside of the corporation’s current earnings and its accumulated profit.

Explanation
  • Everybody on this planet wants a stable income, the case is same with the stockholder’s as many of them are depending on dividend income for their bread and butter and if they didn’t get it might become suffering for them...

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