A liquidating dividend is:
A)Only declared when a corporation closes down.
B)A return of a portion of the original investment back to the stockholders.
C)Not allowed under federal law.
D)Only paid in assets other than cash.
E)Only paid in shares of stock.

Question

Quizplus · Accepted Answer

A liquidating dividend is a distribution of assets to the shareholders of a corporation when it is being liquidated or dissolved. It is a return of a portion of the original investment back to the stockholders. It is not only declared when a corporation closes down. It is allowed under federal law and can be paid in assets other than cash or in shares of stock.

A Liquidating Dividend Is