Which One of the Following Statements Related to Cash Dividends

question 75

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 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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Definitions:

Quarterly Earnings

The financial performance of a company over a three-month period, often reported to the public and used as an indicator of its economic health.

Key Performance Indicator

A quantifiable measure used to evaluate the success of an organization, employee, etc., in meeting objectives for performance.

Engineering and Design Team

A group of professionals specializing in developing new products, solutions, or structures, combining technical engineering knowledge with design principles.

Less Than One Pound

Refers to items or quantities weighing less than one pound, often used in contexts where precision or small measurements are important.