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Question
A corporation has been paying out $1 million per year in dividends for the past several years. This year, the company wants to pay the $1 million dividend, but can't. All of the following are reasons the company cannot continue its dividend payment policy EXCEPTA) the company's net income this year is less than $1 million.
B) the company's retained earnings balance at the end of the year is less than $1 million.
C) the company's cash balance is less than $1 million.
D) the company's liabilities exceed its assets.
Answer
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