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Question
Answer in brief.
Discuss any four features of dividend.
Solution
- It is the portion of the profits of the company paid to its shareholders.
- It is payable out of the profits of the company.
- A dividend is an unconditional payment made by the company.
- The company can pay dividends only to the shareholders viz. (1) Equity (2) Preference.
- If the company has issued equity shares with differential rights as to dividend, the terms of issue of such shares will govern the rights of shareholders about receiving the dividend.
- Dividends cannot be declared out of capital.
- Dividends can be declared only on recommendation of the Board of Directors.
- The dividend, as recommended by the Board of Directors, is approved and declared by a resolution passed at the Annual General Meeting by the shareholders.
- Dividend for any previous year cannot be declared once that year’s Annual Account has been approved in the AGM.
- Dividend once approved and declared by shareholders creates a debt. It cannot be revoked.
- The dividend includes Interim Dividend.
- The dividend must be paid in cash and not in kind.
- The dividend is to be paid on the paid-up value of shares.
- Dividends cannot be paid on calls paid in advance.
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RELATED QUESTIONS
Select the correct answer from the options given below and rewrite the statement.
Dividend is paid to ___________.
Final Dividend is declared by ______.
Dividend cannot be declared out of ______________.
Dividend is recommended by ______________.
Select the correct answer from the options given below and rewrite the statement.
Dividend amount should be transferred in a separate Bank Account within ____________ days of its declaration
Select the correct answer from the options given below and rewrite the statement.
_________ warrant is a cheque containing dividend amount sent by company to the shareholders.
Select the correct answer from the options given below and rewrite the statement.
___________ is not linked to profits of the company
Match the pairs.
| Group ‘A’ | Group ‘B’ |
| a) Dividend | 1) Must inform stock exchange about Dividend declaration |
| b) Interest | 2) Creditors |
| c) IEPF | 3) Registered Shareholders. |
| d) Unpaid Dividend Account | 4) Balance of unpaid Dividend Transferred here. |
| e) Listed Company | 5) Unregistered company. |
| 6) Non-listed company. | |
| 7) Unpaid/Unclaimed Dividend. | |
| 8) Balance of unpaid Bonus transferred here. | |
| 9) Must inform Government about Dividend declaration. | |
| 10) General Public. |
Write a word or a term or a phrase which can substitute the following statement.
The return on investment paid to the shareholders of the company.
Write a word or a term or a phrase which can substitute the following statement.
The shareholders who get dividend at a fixed rate.
Complete the sentence.
Dividend is paid to __________.
Select the suitable option for the following.
Dividendum ____________.
Explain the following term/concept.
Rate of Dividend.
Study the following case/situation and express your opinion :
LMN Co Limited decides to declare a dividend for the financial year 2018-19 in which it has earned profits less than their expectations.
- Is Board right in recommending a dividend of Rs. 5/- per share out of free reserves?
- Can Board declare the dividend though it is not approved by AGM?
- Can the Board give dividends in the form of gifts?
Answer in brief.
State any four points to be kept in mind by a Listed Company with respect to Dividend.
Answer the following question.
Define Dividend and explain its features.
