Asked by Darian Clark on Apr 28, 2024
Verified
Given a compromise dividend policy, firms try to avoid dividend cuts.
Dividend Cuts
A reduction in the dividend amount announced by a company, usually due to financial difficulties or a need to conserve cash.
- Acquire an understanding of the concept and fallout of a compromise dividend policy.
Verified Answer
RV
Rakesh VinodApr 29, 2024
Final Answer :
True
Explanation :
Firms try to avoid dividend cuts under a compromise dividend policy because such cuts can signal financial distress or a negative outlook, potentially leading to a decrease in stock price and investor confidence.
Learning Objectives
- Acquire an understanding of the concept and fallout of a compromise dividend policy.
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