A Liquidating Dividend Is

question 111

Multiple Choice

A liquidating dividend is:

• A)Only declared when a corporation closes down.
• B)A return of a portion of the capital contributed by stockholders.
• C)Not allowed under federal law.
• D)Only paid in assets other than cash.
• E)Only paid in shares of stock.

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Definitions:

Tax Rate

The rate at which taxes are imposed on the income of a person or business.

Expected Growth Approach

A method for estimating a company's future growth by analyzing historical data, trends, and external market factors.

Weighted Average Cost

A calculation that assigns weights to different costs or inputs, based on their relative importance or proportion.

Book Value

The net value of a company's assets minus its liabilities, essentially what shareholders would theoretically receive if a company was liquidated.