Question

Liquidating (script) dividends are when dividends are a return of capital instead of a return on capital.

1) True
2) False

Answer 1

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.