Question

Assertion (A): The equity shareholders are paid dividend on the shares held by them.

Reason (R): As the equity shareholders are the owners and dividend form their earning.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertiori (A) is false, but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

Explanation:

Equity shareholders receive dividends based on the number of shares they possess from the firm's profits, and they own the company to the extent that their shares are held.