Cash dividends reduce cash and retained earnings (and liquidating dividends may also reduce paid-in capital).A regular cash dividend is a cash payments made directly to stockholders, usually each quarter.Extra cash dividendis anindication that the "extra" amount may not be repeated in the future.Special cash dividendis similar to extra dividend, but definitely will not be repeated.Liquidating dividend is when some or all of the business has been sold.

Can a wrong dividend policy bankrupt a firm?

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