35. While taking a loan from a financial institution, Lokesh Enterprises signed an
agreement that they shall not pay dividend to its shareholder more than 15% until the
loan is repaid, or dividend shall not be declared if the liquidity ratio is found to be less
than 1.1. Identify the factor related to dividend decision being described in the above
case.
(a) Access to capital market.
(b) Preferences of shareholders
(c) Contractual constraints
(d) Legal constraints
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Ex. While taking a loan from a financial institution, Lokesh Enterprises signed an
agreement that they shall not pay dividend to its shareholder more than 15% until the
loan is repaid, or dividend shall not be declared if the liquidity ratio is found to be less
than 1.1. Identify the factor related toplanation:
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