Which of the Following Statements Is (Are)true

question 43

Multiple Choice

Which of the following statements is (are) true?

• A) Shareholders have a legal right to receive dividends.
• B) A firm's board of directors must decide whether to pay dividends.
• C) Most U.S. firms that pay cash dividends do so only once every year.
• D) All of the above are true.
• E) Only (a) and (c) are true.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership interest.

Earnings Before Interest

A financial metric that calculates a company's profitability before interest expenses are deducted; however, it is more commonly referred to as EBIT (Earnings Before Interest and Taxes).

Nonrecurring Items

Expenses or incomes that are not expected to happen regularly in a company's financial operations, often excluded for analysis purposes.

Accounting Quality Concerns

Issues related to the accuracy, reliability, and integrity of a company's financial statements and accounting practices.