Determine whether or not the board can declare dividend

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Reference no: EM131250999

Beck Clothiers, Inc. has been a premier contractor for heavy duty work clothes for over forty years. Recently, due to the economic slowdown affecting the construction and other heavy labor industries, Beck's activity indicates that they may incur a loss for the current fiscal year. The chairperson of the board, Sonjia Beck, wants to pay a $0.03 per share common dividend so that the company's record of having paid annual dividend will continue.

Which of the following factors will determine whether or not the board can declare a dividend?

A. Beck Inc. would have to have retained earnings

B. 25% of the board of directors would have to approve the motion

C. Beck Inc. would have to hold enough cash for the payment

D. Sonjia would have to be ready to personally replenish the corporate funds should they pay more than the company has available.

E. A letter of authorization from BBL Bank (the single largest shareholder) would have to be on file.

Reference no: EM131250999

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