All of the following are true statements about dividends except
A)dividends are based upon earnings.
B)no dividends may be paid.
C)dividends are based upon the number of shares.
D)dividends are contractually guaranteed to common stockholders.

Question

Quizplus · Accepted Answer

Dividends are not contractually guaranteed to common stockholders. Companies have the discretion to determine the amount and frequency of dividends, and can choose not to pay dividends at all. The other statements are true: dividends are based upon earnings and the number of shares, and in some cases, no dividends may be paid.

All of the Following Are True Statements About Dividends Except