In all states, Sports Club Company and other corporations can pay dividends from

Question

Quizplus · Accepted Answer

Dividends are generally paid from the corporation's retained earnings, which are the profits that have been accumulated and not distributed to shareholders as dividends in the past. This is because paying dividends from gross profits or net profits would not leave the company with sufficient funds to operate or invest in its growth, while paying dividends from surplus is not a common practice and may not be allowed under state laws. Therefore, the best choice is C, retained earnings.

In All States, Sports Club Company and Other Corporations Can