Any dividend not based on profits must be a reduction of corporate capital, and to that extent, it is a liquidating dividend.

Name: Any dividend not based on profits must be a reduction of corporate capital, and to that extent, it is a liquidating dividend.
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Quizplus · Accepted Answer

Dividends not based on profits are indeed considered a reduction of corporate capital, and thus, they are classified as liquidating dividends, as they distribute part of the capital back to the shareholders.

Any Dividend Not Based on Profits Must Be a Reduction