Question

Which of the following is true about dividends?

A) Dividends are paid at the discretion of the shareholders.
B) Dividends cannot be used for corporate purposes.
C) Dividends will be paid to shareholders who have sold their shares prior to the record date.
D) Dividends in cash or property, once declared, cannot be revoked."

Answer 1

Dividends are payments made by a company to its shareholders. They cannot be revoked once declared. The amount of dividends received depends on the number of shares owned.

Step-by-step explanation:

Dividends are payments made by a company to its shareholders as a way to distribute a portion of its profits. The amount of dividends a shareholder receives depends on the number of shares they own. Option D) is true: once dividends are declared in cash or property, they cannot be revoked. Dividends are paid at the discretion of the company's management, not the shareholders themselves, so option A) is false. Dividends can also be used for corporate purposes, such as reinvesting in the business or paying off debt, so option B) is false. Dividends are paid to shareholders who are recorded as owners on the record date, even if they sell their shares afterwards, so option C) is false.