Which of the following statements is FALSE? From an accounting perspective, dividends generally reduce the firm's current (or accumulated) retained earnings. Most companies that pay dividends pay them semiannually. The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy. Occasionally, a firm may pay a one-time, special dividend that is usually much larger than a regular dividend.

Question

Annika Bowman

Business

28 November, 21:17

Which of the following statements is FALSE? From an accounting perspective, dividends generally reduce the firm's current (or accumulated) retained earnings. Most companies that pay dividends pay them semiannually. The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy. Occasionally, a firm may pay a one-time, special dividend that is usually much larger than a regular dividend.

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Paul · Answer 1

Therefore False Statements Are:

Most of the companies which pay dividends, pay such dividends semiannually.

Occasionally, a firm might pay one-time, special dividend which is usually much larger than the regular dividend.

Explanation:

Dividends are generally paid annually and not semi annually.

One time special dividend that is interim dividend is not higher or lower than the standard dividend it just depends on situation.

Thus the above stated statements are false.

The remaining statements are true.

As the dividends paid generally reduce the current or brought forward retained earnings.

The amount of dividend payed to the ratio of retained earnings is payout ratio.

Therefore False Statements Are:

Most of the companies which pay dividends, pay such dividends semiannually.

Occasionally, a firm might pay one-time, special dividend which is usually much larger than the regular dividend.