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Which of the following is the effect of the payment of dividends by a company to...

Which of the following is the effect of the payment of dividends by a company to its stockholders? a. The company's profitability increases, while its liquidity decreases. b. The company's profitability and liquidity remains unchanged. c. The company's profitability and liquidity decrease. d. The company's liquidity decreases, while profitability remains unchanged.

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answer: d. The company's liquidity decreases, while profitability remains unchanged.

on payment of dividend liquidity decreases as the there would be cash outflow.

Payment of dividend not effect profitability as there would be no change in generation of income

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