If Paid, Dividends Come from Any Profits Remaining After the Firm

question 239

True/False

If paid, dividends come from any profits remaining after the firm has paid taxes. The company cannot deduct dividends as an expense of doing business.

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Definitions:

Credit Risk Analysis

The process of evaluating the likelihood that a lender may not receive the owed principal and interest, which leads to an interruption of cash flows and increased costs for collecting funds.

Financial Ratios

Quantitative measures derived from financial statement analysis used by investors and analysts to assess a company's performance, liquidity, profitability, and solvency.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Growth Companies

Companies characterized by their potential to grow their revenues and earnings at a faster rate than the average business within their industry or market.