A liquidating dividend is:
A)Only declared when a corporation closes down.
B)A return of a portion of the capital contributed back to the 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 paid to shareholders when a company decides to sell all of its assets, pay off any debts and distribute what remains back to the shareholders. It is a return of a portion of the capital contributed back to the stockholders. It is not a regular dividend paid out of the company's earnings.

A Liquidating Dividend Is