A firm pays a constant annual dividend of $$4$ per share of common stock. The firm has $5,000$ shares of stock outstanding. The company:

Multiple Choice

must always show a current liability of $$20,000$ for dividends payable.

incurs a liability that must be paid at a later date should the company miss paying an annual dividend payment.

is obligated to pay $$4$ per share each year in perpetuity.

will be declared in default if it does not pay at least $$4$ per share per year on a timely basis.

must still declare each dividend before it becomes an actual company liability.