Which One of the Following Statements Related to Cash Dividends

question 16

Multiple Choice

Which one of the following statements related to cash dividends is correct?

• A) Extra cash dividends cannot be repeated in the future.
• B) A dividend is never a liability of the issuer until it has been declared.
• C) If a firm has paid regular quarterly dividends for at least five consecutive years, it is legally obligated to continue doing so.
• D) Regular cash dividends reduce paid-in capital.
• E) The dividend yield expresses the annual dividend as a percentage of net income.

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