Dividends can be paid only after all the other obligations of the firm have been met.

Name: Dividends can be paid only after all the other obligations of the firm have been met.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Dividends are paid out of the profits that a firm generates. However, before paying any dividends, the firm must ensure that all its other obligations such as debts, taxes, and operating expenses are paid off first. Therefore, dividends cannot be paid until all other obligations are met.

Dividends Can Be Paid Only After All the Other Obligations