Which of the following situations would NOT necessarily indicate the potential impairment of the underlying securities?
A) The issuing entity is experiencing major financial difficulties.
B) The issuing entity is unable to pay its liabilities.
C) The issuing entity has temporarily halted dividend payments in order to retain cash for future expansion.
D) The issuing entity is undergoing a major reorganization.

Question

Quizplus · Accepted Answer

Temporarily halting dividend payments in order to retain cash for future expansion does not necessarily indicate potential impairment of underlying securities. It may be a strategic decision made by the issuing entity to ensure long-term growth and sustainability. The other situations, such as major financial difficulties, inability to pay liabilities, and major reorganization, can all indicate potential impairment of underlying securities.

Which of the Following Situations Would NOT Necessarily Indicate the Potential