Answer:
b. The amount distributed in any one year can never exceed the net income reported for that year.
Explanation:
If the companys had 100,000 net income per year during 10 year
His retained earnings amount will be 1,000,000
Then, suppose next year income is also 100,000
The company is not doing anything wrong if it distribute dividends for 400,000 as their retained earnings can afford this dividends
Companies can pay more dividends per share (EPS), using cash set aside from previous years to pay dividends. When considering dividends, the key figures are cash and savings. Thus, Option B. is the correct statement.
The dividend is the distribution of profits by a company to its shareholders. When a company earns a profit or a lot of money, it is able to pay part of the profit as dividends to the shareholders.
Many well-known Fortune companies paid dividends over the years in which they sent negative EPS.
EPS is calculated after the popular stock shares with high yields have been paid, where the bulk of the company's share price may already be reflected in the EPS.
Hence, Option B. is the correct answer that is, the amount distributed in any one year can never exceed the net income reported for that year.
To learn more about dividends, refer to the link:
https://brainly.com/question/6155709
