When a corporation decides whether to pay a cash dividend, which of the following is an important consideration?

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When a corporation decides whether to pay a cash dividend, one of the most important considerations is the balances in the corporation's cash and retained earnings accounts. If the corporation has sufficient funds in these accounts, it may choose to pay a dividend to its shareholders. However, if the corporation does not have enough cash or if it needs to retain earnings for future growth or investment opportunities, it may decide to postpone or skip paying a dividend. The number of authorized shares of stock, the book value of the stock, and the balance of paid-in capital are not as critical in determining whether to pay a cash dividend.

When a Corporation Decides Whether to Pay a Cash Dividend