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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

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.

Jul 16 2021 View more View Less

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