If a “Typical” firm reports $20 Million of retained earnings on its balance sheet, could its director decla
If a “Typical” firm reports $20 Million of retained earnings on its balance sheet, could its director declare a $20 Million cash dividend without any qualms whatsoever?
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Theoretically, yes. In fact they can give even more, though the difficult with that would be the characterization of the dividend for tax purposes.
That said, often times, your creditors will not let you give too big a dividend to your shareholders, because then the creditors would be less secure.