There is no requirement for a company to pay a dividend on ordinary shares

Question

Quizplus · Accepted Answer

Unlike preferred shares, there is no obligation or requirement for a company to pay a dividend on ordinary shares. The decision to pay a dividend is made by the company's board of directors and is based on various factors such as the company's financial performance, future prospects, and cash needs for investments and expansions. Hence, some companies may choose not to pay a dividend on ordinary shares, while others may pay a regular dividend or announce periodic special dividends.

There Is No Requirement for a Company to Pay a Dividend