Which of the following is not a prerequisite to paying a cash dividend?
A) formal action by the board of directors
B) market value in excess of par value per share
C) sufficient cash
D) sufficient retained earnings

Question

Quizplus · Accepted Answer

Market value in excess of par value per share is not a prerequisite to paying a cash dividend. The other options are prerequisites to paying a cash dividend. A formal action by the board of directors is necessary to declare the dividend, sufficient cash is required to make the payment, and sufficient retained earnings are necessary to indicate that the company has the financial stability to pay dividends.

Which of the Following Is Not a Prerequisite to Paying