Question

Assertion (A): Declaration of proposed dividend does not result in outflow of cash.

Reason (R): Declaration of proposed dividend does not affect cash of the company since there is no payment of cash.

In the context of the above two statements, which of the following is correct?

Options

• Both (A) and (R) are true, but (R) is not the correct explanation of (A).

• Both (A) and (R) are true, and (R) is the correct explanation of (A).

• Both (A) and (R) are false.

• (A) is false, but (R) is true.

Answer 1

Both (A) and (R) are false.