CA Foundation Exam > CA Foundation Questions > Dividends are usually paid on _________.a)Aut...
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Dividends are usually paid on _________.
- a)Authorized capital
- b)Issued capital
- c)Called-up capital
- d)Paid-up capital
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Dividends are usually paid on _________.a)Authorized capitalb)Issued c...
Dividends are usually paid on Paid-up capital.
- Definition: Paid-up capital refers to the portion of the capital that has been paid by the shareholders to the company.
- Explanation: When a company generates profits, it may decide to distribute a portion of those profits to its shareholders in the form of dividends.
- Purpose: Dividends are a way for companies to share their profits with shareholders and provide them with a return on their investment.
- Calculation: Dividends are typically calculated based on the paid-up capital of the company.
- Payment: Once the company's board of directors approves the dividend distribution, it is paid to the shareholders in proportion to their shareholdings.
- Other factors: While paid-up capital is a key factor in determining the dividends, other factors such as company performance, profitability, and financial stability also play a role in dividend distribution decisions.
Therefore, dividends are usually paid on the paid-up capital of a company.
Most Upvoted Answer
Dividends are usually paid on _________.a)Authorized capitalb)Issued c...
Because dividend is paid on the profit earned from the paid up capital received
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Dividends are usually paid on _________.a)Authorized capitalb)Issued capitalc)Called-up capitald)Paid-up capitalCorrect answer is option 'D'. Can you explain this answer?
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