If a typical firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing Explain your answer ...

No because the 20 million of retained earnings w ...

If a typical firm reports $20 million of retained earnings on its balance sheet, could its directors

Question:

If a “typical” firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash without having any qualms about what they were doing? Explain your answer.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...