Which of the following is not true regarding common stock?
A) Common stock has no maturity.
B) New issues of common stock may dilute existing shareholder equity.
C) Common stock is a permanent source of funds.
D) Dividends paid are not tax-deductible.
E) Dividends are considered a fixed charge that must be paid.

Question

Quizplus · Accepted Answer

Dividends are not considered a fixed charge that must be paid. The board of directors may choose to not pay dividends, even if the company is profitable.

Which of the Following Is Not True Regarding Common Stock