Final answer:
Liquidating (script) dividends are when dividends are a return of capital instead of a return on capital. This statement is True.
Step-by-step explanation:
Liquidating (script) dividends are when dividends are a return of capital instead of a return on capital. This statement is True. In some cases, when a company does not have sufficient profits to distribute as dividends, they may return the shareholders' original investment by issuing liquidating dividends. These dividends are considered as a return of capital rather than a return on capital.