Question

Dividends are: Multiple Choice payable at the discretion of a firm's president. treated as a tax-deductible expense of the issuing firm. paid out of aftertax profits.. paid only to preferred stockholders. only partially taxable to high-income individual shareholders.

Answer 1

paid out of after tax profits

Step-by-step explanation:

When the business organization earns net profit during the given period. It is compulsory to distribute the dividend to preference shareholders and the equity shareholders and if the company is suffering from the losses then no dividend would be declared

The priority is given to the preference shareholders over the equity shareholders

So, the after tax profits would be computed below:

= Total revenue - total expenses - income tax expense