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The dividends paid by a corporation reduce the taxable income of the corporation. True False

Question:

The dividends paid by a corporation reduce the taxable income of the corporation.

True

False

Dividend:

The dividend is a stream of earnings on an equity investment. It is also used to determine the value of a stock. In fact, dividends might not be paid out on a regular basis.

Answer and Explanation:

The answer is FALSE.

Dividends will be paid out from the source of net income, which is not considered as an expense and hence, not deductible. That means it will not reduce the taxable income.


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Cash Dividends & Dividend Payment

from Finance 101: Principles of Finance

Chapter 16 / Lesson 1
4.8K

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