Which of the Following Statements About a Cash Dividend Is

question 67

Multiple Choice

Which of the following statements about a cash dividend is incorrect?

• A) The legality of a cash dividend depends on state corporation laws.
• B) The legality of a dividend does not indicate a company's ability to pay a dividend.
• C) Dividends are not a liability until declared.
• D) Shareholders usually vote to determine the amount of income to be distributed in the form of a dividend.

---

Definitions:

Invested

To distribute financial resources aiming for potential benefits down the line, including income or profits.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit over time.

Compounded Semi-Annually

The process of calculating and adding interest to the principal sum of a loan or deposit twice a year.

9 Years

A period of time equivalent to nine cycles of 365 (or 366 in leap years) days, commonly used in reference to durations or time frames in various contexts.