True or False 1. Share dividends increase the proportionate interests of the shareholders because of the increase in their shareholdings. 2. For most companies, the amount and timing of dividend declarations are determined by the shareholders at their annual meeting. 3. Retained earnings consist of a pool of funds to be distributed to shareholders. 4. A liquidating dividend is usually paid when a corporation is going out of business or reducing its operations. 5. Dividends are contractual obligations of the corporation which must be paid at regular intervals. 6. In case of liquidation, the claims of the preference shareholders are given preference over the claims of creditors. 7. Retained earnings represent cash readily available for dividends. 8. Dividends in arrears refer to passed preference dividends which must be satisfied. before any dividends may be paid on ordinary shares. 9. In most cases, corporations pay out dividends equal to profit unless specific restrictions, either legal or financial, are stated in the annual report. 10. The date on a statement of changes in shareholders' equity is for a period of time rather than for a specific point in time. 11. Cash dividends are declared by the board of directors with the concurrence