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University of Baltimore Law Review

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Abstract

Corporation statutes and accounting principles have traditionally dictated that cash dividends to stockholders are available only out of retained earnings and capital in excess of par or stated value. It appears that under Maryland law an additional source is available, in the form of a capital surplus created by a revaluation of fixed assets. The author suggests that this may be done by an actual write up of asset value on the company books from cost to fair value, or by an informal appraisal, despite objections from the accounting profession.The author also discusses the tax treatment of revaluation and the notice requirements of the Securities and Exchange Commission.

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