Which one of the following is an example of a liquidating dividend?
A)Valley Feed Mills recently sold its grain storage facility and is distributing the proceeds of that sale to its shareholders.
B)Kate's Winery has excess cash that it wishes to distribute to its shareholders in addition to its normal cash dividend. This extra distribution usually occurs about once every year.
C)Kurt's Music is planning to increase its quarterly dividend by 3 percent.
D)The Dried Florist is preparing to pay its first annual dividend of $0.08 per share.
E)Hi Tek had an extraordinarily profitable year and has decided to do a one-time only $10 per share cash dividend.

Question

Quizplus · Accepted Answer

A liquidating dividend is when a company distributes the proceeds from the sale of its assets to shareholders. In this scenario, Valley Feed Mills is distributing the proceeds from the sale of its grain storage facility, which qualifies as a liquidating dividend. The other choices do not involve the distribution of assets sale proceeds and are not examples of liquidating dividends.

Which One of the Following Is an Example of a Liquidating