Question

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include...

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include all of the following EXCEPT

prohibit the payment of cash dividends until a certain level of earnings has been achieved.
limit the percentage of earnings that can be paid out in dividends.
limit the actual dollar amount of dividends that can be paid out.
require the payment of a common stock dividend.
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Answer #1

Solution:

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include all of the following EXCEPT "Require the payment of a common stock dividend"

Hence last option is correct.

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