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:

Dividend Income

Income received from owning shares of a company which pays out earnings to its shareholders.

Shares

Units of ownership interest in a corporation or financial asset, providing a portion of the profits to shareholders in the form of dividends.

Annual Coupon

Annual Coupon refers to the yearly interest payment that bondholders receive from the bond's issue date until it matures.

Face Value

Face value refers to the nominal value or original cost of a security as stated by its issuer, crucial for calculating interest payments for bonds.