Question

Financial managers:

a. prefer cutting dividends over incurring flotation costs.
b. tend to prefer cutting dividends every time quarterly earnings decline.
c. are reluctant to cut dividends.
d. place little emphasis on dividend policy consistency.
e. tend to ignore past dividend policies.

Answer 1

c. are reluctant to cut dividends.

Step-by-step explanation:

For shareholders of a company a news on dividend cut is not at all a good news. This leads to an expectation that the company might cut future dividends. This leads to a fall in share price and decrease in market value of the company.