Australian law concerning how a company can pay a dividend is highly complex.Which of the following IS NOT one of the criteria directors must satisfy: Group of answer choicesThe dividend does not materially prejudice the company's ability to pay its creditorsThe dividend is fair and reasonable to the company's shareholders as a wholeThe company has sufficient net assets;Current ratio is at least 2:1

Which section of the Corporations Act provides that a company must not pay a dividend unless:(a) the company's assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and(b) the payment of the dividend is fair and reasonable to the company's shareholders as a whole; and(c) the payment of the dividend does not materially prejudice the company's ability to pay its creditors.Group of answer choices

A majority of the board of directors is sufficient to declare stock dividends.Group of answer choicesTrueFalse

Dividend policies in practice vary across companies based on:a.Industry norms and competitive factorsb.Regulatory requirements and tax implicationsc.Cash flow availability and future investment opportunitiesd.All of the above

Which one of the following statements is False:Group of answer choicesAn empirical study from Lintner (1956) finds that managers and investors seem more concerned with dividend changes than with dividend levels.The Miller and Modigliani (1961) dividend irrelevance proposition assumes no cost of issuing shares.In Australia, the majority of companies that distribute dividends do so on a quarterly basis.The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy.

What is dividend ? Discuss the law relating to payment of dividend by companies?