Carlton Containers has a dividend policy whereby the firm pays a constant annual dividend of $1.95 per share of common stock. The firm has 10,000 shares of stock outstanding. The company ??? - must always show a current liability of $19,500 ($1.95 x 1,000) for dividends payable. - is obligated to pay $1.95 per share each year in perpetuity. - must still declare each dividend before it becomes an actual company liability. - will be declared in default if it does not pay at least $1.95 per share per year on a timely basis. - has a liability that must be paid at a later date should the company miss paying an annual dividend payment.
Carlton Containers has a dividend policy whereby the firm pays a constant annual dividend of $1.95 per share of common stock. The firm has 10,000 shares of stock outstanding. The company ??? - must always show a current liability of $19,500 ($1.95 x 1,000) for dividends payable. - is obligated to pay $1.95 per share each year in perpetuity. - must still declare each dividend before it becomes an actual company liability. - will be declared in default if it does not pay at least $1.95 per share per year on a timely basis. - has a liability that must be paid at a later date should the company miss paying an annual dividend payment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Carlton Containers has a dividend policy whereby the firm pays a constant annual dividend of $1.95 per share of common stock. The firm has 10,000 shares of stock outstanding. The company ???
- must always show a current liability of $19,500 ($1.95 x 1,000) for dividends payable.
- is obligated to pay $1.95 per share each year in perpetuity.
- must still declare each dividend before it becomes an actual company liability.
- will be declared in default if it does not pay at least $1.95 per share per year on a timely basis.
- has a liability that must be paid at a later date should the company miss paying an annual dividend payment.
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