ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes
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No
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Either A or B
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None of the above
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Detailed explanation-1: -Are Dividends Guaranteed On Common Stocks? No, companies are NOT legally required to pay dividends. Furthermore, businesses that currently choose to pay dividends may reduce, temporarily suspend, or terminate their dividend payments at any time and for any reason.
Detailed explanation-2: -This is because smaller companies often need to reinvest their profits to grow their business over time, rather than pay them out to shareholders. There are no guarantees that any company will offer a dividend.
Detailed explanation-3: -Key Takeaways. Guaranteed stock is a rarely used form of preferred stock, where a party other than the original company guarantees dividends will be paid. Guaranteed stock issues, like guaranteed bonds, have most often used by railroads and public utilities.
Detailed explanation-4: -You may directly contact the RTA (Registrar and Transfer agents) of the company. The RTA’s information will be available in the ‘Company Information’ section of the company on both NSE and BSE websites.
Detailed explanation-5: -Companies that don’t pay dividends on stocks are typically reinvesting the money that might otherwise go to dividend payments into the expansion and overall growth of the company. This means that, over time, their share prices are likely to appreciate in value.