Answer: Dividends being financed by new debt

## Explanation Let's analyze each option: **A. Dividends being financed by new debt** - This is a clear warning sign. When a company has to borrow money to pay dividends, it indicates that its operating cash flows are insufficient to cover dividend payments. This is unsustainable in the long term and often precedes dividend cuts. **B. Dividend yield at the lowest historical level** - A low dividend yield could simply mean the stock price has increased significantly, which is actually a positive sign. It doesn't necessarily indicate dividend sustainability issues. **C. Dividend coverage ratio consistently increasing** - This is a positive signal, indicating the company's ability to cover dividends is improving, not deteriorating. **Correct Answer: A** - Financing dividends with new debt is a classic red flag for dividend sustainability.

Author: LeetQuiz Editorial Team