Question

Which of the following statements about the declaration and payment of cash dividends is correct?

A) Declaration and payment of cash dividends will reduce the amount of net income.

B) Declaration and payment of cash dividends will not reduce the Retained Earnings balance.

C) Declaration and payment of cash dividends will reduce the amount of cash available to invest in assets.

D) Declaration and payment of cash dividends is calculated on the amount of shares of stock issued, not the amount of shares outstanding.

Answer

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