Question

The capital impairment restrictions are established to​ ________. A. provide sufficient safety to equity holders B. constrain the firm to paying dividends which do not require additional borrowing C. provide a sufficient equity base to protect​ creditors' claims D. reduce dividends equal to or below the current earnings level

Answer 1

Answer:

C. provide a sufficient equity base to protect​ creditors' claims

Explanation:

• The capital impairments are when a company losses its asset and s a sort of restricting that is established to give a sufficient base to the protector credit claims as to when the dollar dividends and adjustment in earnings increases.  

• The dividend policy will not affect the total values of the forms issued capital and thus the capital impairment will be minimized in a most possible manner.