Which of the following is most likely to be found in state laws regarding payment of dividends?
A) Dividends may be paid from legal capital.
B) Retained earnings are available for dividends unless restricted by contract or by statute.
C) Unrealized capital is available for any type of dividend.
D) Capital from donated assets is available for dividends.

Question

Quizplus · Accepted Answer

State laws generally allow for the payment of dividends from retained earnings unless restricted by contract or by statute. Dividends cannot normally be paid from legal capital or capital from donated assets, and unrealized capital is typically not available for dividends.

Which of the Following Is Most Likely to Be Found