Question $9$ of $50$

What is wrong with using dividends as the "plug" in constructing a forecasted balance sheet?

Thmment

Using dividends as the "plug" in constructing a forecasted balance sheet introduces the complication of varying interest expense based on the size of the "plug."

Companies are very careful that dividends either remain stable or go up little by little over the course of years.

Using dividends as the "plug" in constructing a forecasted balance sheet ignores the impact of income taxes.

Companies are very careful that the accounts receivable balance decreases little$-$by$-$little over the course of years, and payment of dividends can upset this trend.