ICMA FMFQ Exam - Topic 2 Question 37 Discussion

Actual exam question for ICMA's FMFQ exam

Question #: 37
Topic #: 2

Which of the following statements is true of dividend payments in the equity market?

AAll equities pay dividends

BDividend rates are pre-determined at the launch of the equity

CManagement determines the level of dividend payment in each period

DIf a company does not pay a dividend one year then this skipped dividend becomes a liability on the company's balance sheet

Show Suggested Answer

Suggested Answer: C

by Helaine at May 06, 2022, 05:24 PM

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King

6 months ago

B is misleading, dividends can change over time, not set in stone.

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Claribel

6 months ago

Wait, really? I thought skipped dividends were just a choice, not a liability!

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Patrick

6 months ago

A is definitely false, not all stocks pay dividends.

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Tamra

7 months ago

Totally agree, C is the way it works!

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Danilo

7 months ago

C is true, management decides on dividends each period.

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Reita

7 months ago

I thought dividend rates were set when the equity is launched, but now I'm questioning if that's always true.

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Jacquelyne

7 months ago

I practiced a similar question, and I recall that skipped dividends aren't liabilities, so D should be incorrect.

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Ma

7 months ago

I’m a bit unsure, but I feel like management does decide on dividends each period, which might make C the right choice.

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Reuben

7 months ago

I think I remember that not all equities pay dividends, so option A seems wrong.

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Jordan

7 months ago

Custom developments as Architecture Building Blocks? That doesn't sound right to me. I'll have to double-check my notes on TOGAF.

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Vashti

7 months ago

I'm a bit confused on this one. I know we use odiRef to access information, but I'm not sure which method is the right one for getting the error message. I'll have to think this through carefully.

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