Knowee
Questions
Features
Study Tools

The date on which a cash dividend becomes a binding legal obligation is on the

Question

The date on which a cash dividend becomes a binding legal obligation is on the

🧐 Not the exact question you are looking for?Go ask a question

Solution

Step 1: Define the Problem

Identify the key components of the question that need to be addressed:

  • Determine the specific date when a cash dividend becomes a binding legal obligation for a company.

Step 2: Break Down the Problem

Divide the problem into smaller, manageable parts:

  • Understand the process of declaring and paying dividends.
  • Identify the key dates involved in the dividend process.

Step 3: Apply Relevant Concepts

Use appropriate academic theories or formulas to solve each part of the problem:

  • In the context of dividends, there are several important dates: declaration date, record date, ex-dividend date, and payment date.
  • The declaration date is when the board of directors announces the dividend, creating a legal obligation.

Step 4: Analysis, Verify and Summarize

Analyze each part in detail if necessary, carry out the calculations by steps. Verify the calculations result and summarize the findings:

  • The declaration date is crucial because it is when the company formally commits to paying a dividend, thus creating a binding legal obligation.

Final Answer

The date on which a cash dividend becomes a binding legal obligation is the declaration date.

This problem has been solved

Similar Questions

______ dividend promises to pay shareholders at future date.  Cash Stock Property Scrip

Which of the following dates associated with dividends does not require an entry to be recorded?Multiple ChoicePayment dateDeclaration dateRecord date

On the date of declaration of the dividend, we _____.Multiple Choicecredit Retained Earningscredit Cashdebit Dividendsdebit Dividends Payable

What is dividend ? Discuss the law relating to payment of dividend by companies?

Cash dividend payable is classified as a current liability once declared.Group of answer choicesTrueFalse

1/2

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.