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The directors of a small, closely held corporation may be reluctant to pay dividends at all because:

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The directors of a small, closely held corporation may be reluctant to pay dividends at all because:

 Options:

A. the dividends will be taxed at a higher rate
B. they fear diluting the cash position of the firms
C. they haven’t the means to do a complete funds flow analysis
D. they fear a shareholder proxy battle

 

The Correct Answer Is:

  • B. they fear diluting the cash position of the firms

 

Conclusion

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