Dividends representing a return of capital to stockholders are not uncommon among companies which
A) use accelerated depreciation methods.
B) use straight-line depreciation methods.
C) recognize both functional and physical factors in depreciation.
D) none of these answers are correct.

Question

Quizplus · Accepted Answer

Dividends representing a return of capital are not directly related to the method of depreciation a company uses. The method of depreciation (accelerated, straight-line, or considering both functional and physical factors) primarily affects the company's financial statements and tax liabilities, not the nature or reason for dividend distributions.

Dividends Representing a Return of Capital to Stockholders Are Not