Which of the following is true about dividends?

Question

Quizplus · Accepted Answer

Dividends are paid at the discretion of the board of directors. While it is common for corporations to pay dividends to their shareholders, it is not a legal requirement. The board of directors ultimately decides whether or not to declare a dividend and how much to pay. This decision is based on numerous factors, including the financial health of the company, its growth potential, and the needs of its shareholders. It's essential to note that once a dividend is declared, it cannot be revoked, and officers of the corporation may choose to retain profits for future corporate use rather than distribute them as dividends. Shareholders have no legal right to a dividend, and therefore, they cannot sue the corporation to recover undeclared dividends.

Which of the Following Is True About Dividends