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
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.
