Question

Which statement about payment of dividends on equity is correct?

विकल्प

• Dividend is compulsory under the borrowing terms

• Dividend must be repaid at the specified time

• Dividend is not compulsory

• Dividend is deductible while determining taxable profit

Answer 1

Dividend is not compulsory in the same manner as interest on debt. Equity therefore does not create the same compulsory payment commitment.