Scott SpA Has a General Dividend Policy Whereby It Pays

Multiple Choice

Scott SpA has a general dividend policy whereby it pays a constant annual dividend of €1 per share. The firm has 1,000 shares outstanding.The company:

A) must always show a current liability of €1,000 for dividends payable.
B) is obligated to continue paying €1 per share per year.
C) will be declared in default and can face bankruptcy if it does not pay €1 per year to each
Shareholder on a timely basis.
D) has a liability which must be paid at a later date should the company miss paying an
Annual dividend payment.
E) must still declare each dividend before it becomes an actual company liability.