A dividend that constitutes a return of contributed capital rather than earnings is called a:
A)Liability dividend.
B)Property dividend.
C)Liquidating dividend.
D)Capital dividend.

Question

Quizplus · Accepted Answer

A liquidating dividend is paid out to shareholders when a portion of the capital that shareholders originally invested in the company is returned to them. This type of dividend is typically distributed during the partial or complete liquidation of a company, distinguishing it from regular dividends that are paid out of the company's earnings.

A Dividend That Constitutes a Return of Contributed Capital Rather