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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.
Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'D'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
If the company does not earn profit, the preference shareholders are not given dividend as dividend cannot be declared in case of no profit even if they have preferential rights.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.
Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.
The correct answer is option 'D': Assertion (A) is false, but Reason (R) is true.
Explanation:
The assertion states that preference shareholders are given a fixed rate of dividend even if the company earns no profit. However, this statement is not entirely true.
Preference Shares:
Preference shares are a type of shares issued by a company that provides certain preferential rights to the shareholders. These rights may include a fixed rate of dividend, preference in payment of dividend and capital, and preference in case of winding up of the company.
Dividend Payment:
When a company earns profit, it distributes a portion of its profit among the shareholders as dividends. However, the payment of dividends is subject to the availability of profits. If a company does not earn any profit or has insufficient profits, it may not be able to pay dividends to its shareholders.
Fixed Rate of Dividend:
Preference shareholders are given a fixed rate of dividend, which means that they are entitled to receive a fixed amount or a fixed percentage of their investment as dividends. This fixed rate of dividend is specified at the time of issuing preference shares and is mentioned in the terms of the share agreement.
Preference Right of Dividend:
The reason states that preference shares have a preferential right of dividend to be paid as a fixed amount or an amount calculated at a fixed rate. This means that preference shareholders have a higher priority in receiving dividends compared to equity shareholders.
Income Tax:
The reason also mentions that the fixed rate of dividend paid to preference shareholders may either be free of or subject to income tax. The tax treatment of dividends depends on the tax laws of the country and the individual circumstances of the shareholders.
Conclusion:
Based on the explanation above, it can be concluded that while preference shareholders are entitled to a fixed rate of dividend, the payment of dividends is subject to the availability of profits. Therefore, the assertion is false. However, the reason is true as preference shares do have a preferential right of dividend, which may be paid as a fixed amount or calculated at a fixed rate, and the tax treatment of dividends may vary.
Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.
The correct answer is option 'D': Assertion (A) is false, but Reason (R) is true.
Explanation:
The assertion states that preference shareholders are given a fixed rate of dividend even if the company earns no profit. However, this statement is not entirely true.
Preference Shares:
Preference shares are a type of shares issued by a company that provides certain preferential rights to the shareholders. These rights may include a fixed rate of dividend, preference in payment of dividend and capital, and preference in case of winding up of the company.
Dividend Payment:
When a company earns profit, it distributes a portion of its profit among the shareholders as dividends. However, the payment of dividends is subject to the availability of profits. If a company does not earn any profit or has insufficient profits, it may not be able to pay dividends to its shareholders.
Fixed Rate of Dividend:
Preference shareholders are given a fixed rate of dividend, which means that they are entitled to receive a fixed amount or a fixed percentage of their investment as dividends. This fixed rate of dividend is specified at the time of issuing preference shares and is mentioned in the terms of the share agreement.
Preference Right of Dividend:
The reason states that preference shares have a preferential right of dividend to be paid as a fixed amount or an amount calculated at a fixed rate. This means that preference shareholders have a higher priority in receiving dividends compared to equity shareholders.
Income Tax:
The reason also mentions that the fixed rate of dividend paid to preference shareholders may either be free of or subject to income tax. The tax treatment of dividends depends on the tax laws of the country and the individual circumstances of the shareholders.
Conclusion:
Based on the explanation above, it can be concluded that while preference shareholders are entitled to a fixed rate of dividend, the payment of dividends is subject to the availability of profits. Therefore, the assertion is false. However, the reason is true as preference shares do have a preferential right of dividend, which may be paid as a fixed amount or calculated at a fixed rate, and the tax treatment of dividends may vary.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Preference shareholders are given a fixed rate of dividend even if the company earns no profit.Reason (R): The preference shares have preferential right of dividend to be paid as fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income tax.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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