A liquidating dividend is:
A)Only declared when a corporation closes down.
B)A return of a portion of the capital contributed by stockholders.
C)Not allowed under federal law.
D)Only paid in assets other than cash.
E)Only paid in shares of stock.

Question

Quizplus · Accepted Answer

A liquidating dividend is a type of dividend paid to shareholders when a company is liquidating or selling off its assets. It represents a return of a portion of the capital contributed by stockholders. This type of dividend is different from regular dividends which are typically paid out of a company's profits.

A Liquidating Dividend Is