Holders of ordinary shares:
A) are assured of dividends each year.
B) may not receive a cash dividend each year but the dividend will accrue and eventually be paid.
C) will always receive a dividend if the company has made a profit in that financial year.
D) receive dividends at the discretion of the board.

Question

Quizplus · Accepted Answer

Holders of ordinary shares receive dividends at the discretion of the board. The board may decide to use the profits to reinvest in the company instead of paying out dividends to the shareholders. Therefore, shareholders are not assured of dividends each year and may not receive a cash dividend each year.

Holders of Ordinary Shares