Consider the case of a business that has had a very profitable year and earned a million dollars in profits.Can it distribute a million dollars to its owners (via dividends)?
A)Yes,definitely
B)Maybe,maybe not
C)Definitely not
D)It can certainly distribute over a million dollars.

Question

Quizplus · Accepted Answer

While the business may have earned a million dollars in profits, there are other factors to consider before distributing all of it to the owners. The business may have outstanding debts, taxes or legal obligations that need to be paid before any distributions can be made. Additionally, the business may want to retain some of the profits for future investments or to build up cash reserves. Therefore, it is possible that the business may not be able to distribute the entire million dollars to its owners.

Consider the Case of a Business That Has Had a Very