If a corporation is profitable,directors must declare a dividend to holders of common shares according to their proportionate shareholding.

Name: If a corporation is profitable,directors must declare a dividend to holders of common shares according to their proportionate shareholding.
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Question

Quizplus · Accepted Answer

Directors have the discretion to decide whether or not to declare a dividend, even if the corporation is profitable. They may choose to retain earnings for reinvestment in the company or other reasons.

If a Corporation Is Profitable,directors Must Declare a Dividend to Holders