Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 6, Problem 3Q

If a “typical” firm reports $20 million of retained earnings on its balance sheet, can the firm definitely pay a $20 million cash dividend?

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If a “typical” firm reports $20 million of retained earnings on its balancesheet, can the firm definitely pay a $20 million cash dividend?
If a typical firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without any qualms? Explain why or why not.
If a "typical" firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing? Explain your answer.
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