Question

Which of the following should not influence a firm's dividend policy decision? a. The fact that much of the firm's equipment has been leased rather than bought and owned. b. A strong preference by most shareholders for current cash income versus capital gains. c. The fact that Congress is considering changes in the tax law regarding the taxation of dividends versus capital gains. d. Constraints imposed by the firm's bond indenture. e. The firm's ability to accelerate or delay investment projects.

Answer 1

The correct option is A.

Step-by-step explanation:

Amongst the other options, The fact that much of the firm's equipment has been leased rather than bought and owned should not influence a firms dividends decision.

A firm's dividend policy dictates the amount of dividends paid out by the company to its shareholders and the number of times with which the dividends are paid out.