A Dividend That Represents a Return to the Stockholders of a Part

question 119

True/False

A dividend that represents a return to the stockholders of a part of their paid-in capital rather than a distribution out of retained earnings is called a cash dividend.

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Definitions:

Stock Exchange

A marketplace where securities, such as stocks and bonds, are bought and sold.

Capital Markets

Financial markets where long-term debt or equity-backed securities are bought and sold, facilitating the raising of capital and investment.

Loss Contingency

A potential financial loss that might occur in the future, dependent on the outcome of a specific event, recorded in accounting if it is probable and the amount can be reasonably estimated.

U.S. GAAP

United States Generally Accepted Accounting Principles, the collection of rules and procedures designed to ensure consistency and transparency in financial reporting.