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Capital Structure and Dividend Policy

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Which of the following should not influence a firm's dividend policy decision?

The firm's ability to accelerate or delay investment projects, A strong preference by most shareholders in the economy for current cash income versus capital gains, constraints imposed by the firm's bond indenture, the fact that much of the firm's equipment has been leased rather than bought and owned, and the fact that Congress is considering tax law changes regarding the taxation of dividends versus capital gains.

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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