Answer the following statements true (T) or false (F)
1. Corporations may not retire preferred stock in order to avoid paying the preferred dividends.
2. A profitable corporation may make distributions to stockholders in the form of bonuses.
3. Dividends can be paid in the form of cash, stock, or other property.
4. Cash dividends cause a decrease in both assets and stockholders' equity of the corporation.
5. The declaration of a cash dividend does not create an obligation for the corporation.
1. FALSE
2. FALSE - Explanation: A profitable corporation may make distributions to stockholders in the form of dividends.
3. TRUE
4. TRUE
5. FALSE
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