Which One of the Following Statements Concerning Cash Dividends Is

question 203

Multiple Choice

Which one of the following statements concerning cash dividends is correct?

• A) The chief financial officer of a corporation determines whether or not a dividend will be paid.
• B) A dividend is not a liability of a firm until it has been declared.
• C) If a firm has paid regular quarterly dividends in the past it is legally obligated to continue doing so.
• D) Cash dividends always reduce the common stock account balance.
• E) The dividend yield expresses the dividend amount as a percentage of the net income.