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Question
Explain the following term/concept.
Rate of Dividend.
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Solution
A dividend is that part of the profits of a company which is distributed amongst its shareholders. Equity shareholders are given dividends at a fluctuating rate depending upon the profits of the company, whereas preference shareholders receive dividends at a fixed rate. Also, the rate of interim dividend is usually lower than the final dividend.
The Rate of Dividend refers to the percentage of dividend declared by a company on the face value of its shares.
Rate of Dividend = `"Dividend per Share"/"Face value of share" xx 100`
Example: If the face value of a share is ₹100 and the dividend declared is ₹20 per share, then the rate of dividend will be 20%.
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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 ______.
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) Equity Shareholders |
| b) Interest | 2) Appropriation of profit. |
| c) Interim Dividend | 3) Recommendation of Secretary. |
| d) Final Dividend | 4) Registrar of company. |
| e) Fluctuating Rate of Dividend | 5) Obligatory to pay |
| 6) Decided and Declared by the Board of Directors. | |
| 7) Decided by Board; declared by Members. | |
| 8) Decided by President of India. | |
| 9) Company not allowed to pay. | |
| 10) Declared by Govt. of India |
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.
State whether the following statement is true or false.
Dividend is decided by the Board.
Complete the sentence.
Word dividend is derived from Latin term ______.
Complete the sentence.
Dividend is paid to __________.
Answer in one sentence.
What is Dividend?
Answer in one sentence.
What is final Dividend?
Select the correct option from the bracket.
| Group ‘A’ | Group ‘B’ |
| a) Preference Shares | 1) ____________ |
| b) Equity Shares | 2) ____________ |
| c) Deposit holders | 3) ____________ |
| d) ____________ | 4) Payment of Dividend |
| e) ____________ | 5) Dividend Declared but not paid/claimed |
(Unclaimed/Unpaid Dividend, Fixed rate Dividend, Dividend at a Fluctuating Rate, Interest, Within 30 days)
Explain the following term/concept.
Dividend
Explain the following term/concept.
Final 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 the following question.
Define Dividend and explain its features.
