Question

Justify the following statements.
'Dividend is paid out of profits of the
Company

Answer 1

Answer:

.

KEY TAKEAWAYS

Dividends represent the distribution of corporate profits to shareholders, based upon the number of shares held in the company.

Shareholders expect the companies that they invest in to return profits to them, but not all companies pay dividends.

Some companies keep profits as retained earnings that are earmarked for re-investment in the company and its growth, giving investors capital gains.

Often, growth companies retain earnings while more mature companies resort to dividend payouts.

Answer 2

Explanation:

dividend is paid out of profits. of the company