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Question
Dividends can be paid out of capital.
Options
True
False
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Solution
This statement is False.
Explanation:
Dividend is the return payable to the company's shareholders for their investment in the share capital. It is the portion of profits of the company paid to its shareholders. It is payable out of the earnings of the company. The dividend is an unconditional payment made by the company. Dividends must be paid in cash and not in kind.
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