SIE practice questioneasyDividends
Which statement best describes a cash dividend?
- AA distribution of company earnings to shareholders in cash✓ Correct answer
- BA mandatory payment by all companies
- CA payment only to bondholders
- DA guaranteed income for shareholders
Explanation
Why A — A distribution of company earnings to shareholders in cash
Cash dividends are voluntary payments from company earnings to shareholders. They are not mandatory, not exclusive to bondholders, and not guaranteed.
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