Describe the types of limitations firms can face from legal restrictions on dividend payments
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Time Limits on Forcing the Corporation to Pay Dividends to Shareholders.
Factors Influencing the Value of the Firm. Click card to see ... Legal Constraints: * Capital ... Limits the amount of dividends a company can pay out to its shareholders.
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Limits the amount of dividends a company can pay out to its shareholders. The firm must generate earnings before it is permitted to pay any cash dividends. ... An insolvent company can't pay cash dividends since it would interfere with any creditor's prior claims on remaining assets.
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