Which of the Following Statements About Dividends Is Not Correct

question 1

Multiple Choice

Which of the following statements about dividends is not correct?

• A) Cash dividends are generally declared quarterly as a dollar amount per share.
• B) Dividends can be declared on both preferred and common shares.
• C) The board of directors is obligated to declare dividends.
• D) Dividends can be in cash or stock.

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Definitions:

Variable Component

The portion of costs or expenses that varies directly with changes in production volume or business activity.

Fixed Component

The portion of a cost or expense that remains constant regardless of the level of production or business activity.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, based on a chosen activity base.

Variable Component

A portion of a cost or expense that varies directly with the level of activity or production volume.