Define disclosure of dividend policy is primarily protective

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Question: Under previous disclosure requirements of the SEC, dividends paid during the past two years to shareholders must be stated in the annual report. This requirement has been broadened:

a. There must be disclosure of any restrictions on the firms present or future dividend-paying ability.

b. If the firm has not paid dividends in the past despite the availability of cash, and the corporate intention is to continue to forgo paying dividends in the foreseeable future, disclosure of this policy is encouraged.

c. If dividends have been paid in the past, the firm is encouraged to disclose whether this condition is expected to continue in the future. Do you think that this broadening of disclosure of dividend policy is primarily protective or informative- Discuss.

Reference no: EM131529487

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