Corporations declare cash dividends from retained earnings.

Question

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Corporations can declare cash dividends from their retained earnings, which are profits that have not been distributed to shareholders but have been kept by the company for various purposes such as reinvesting in the business or paying off debt. Companies generally announce the amount of the dividend per share and the payment date, which is typically a few weeks or months after the declaration. Shareholders who own the stock on the record date are eligible to receive the dividend.

Corporations Declare Cash Dividends from Retained Earnings