Which statement correctly describes the company's dividend decision?
A) The dividend payment is set by shareholders at the annual general meeting.
B) The dividend payment is the sole responsibility of the company's management.
C) The dividend payment must be approved by the board of directors.
D) The dividend payment is set by the company's bondholders together with the shareholders.

Question

Quizplus · Accepted Answer

The dividend payment must be approved by the board of directors. While shareholders have the ultimate authority to approve or reject dividend payments, it is typically the responsibility of the board of directors to make recommendations about dividend policy and to oversee the management's implementation of the policy. Bondholders do not have a direct role in setting dividend policy.

Which Statement Correctly Describes the Company's Dividend Decision