Question

The
on equity shares is not cu
mulative.
(A) Dividend
(B Profit
(C) Loss
(D) Reserve​

Answer 1

Explanation:

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Answer 2

The correct option is Option (A) Dividend.

The dividend on equity shares is not cumulative.

A dividend is a imbursement made by a company to its primary shareholders from its profits or reserves.

• Equity shareholders are compensated on the basis of earnings of the company and do not get a fixed dividend.
• They are referred to as ‘residual owners. They obtain what is left after all other claims on the company’s revenue and assets have been settled.
• Through their right to vote, these shareholders have a right to take part in the management of the company.
• Cash dividends are cash outflows to a company's owners that are denoted as a significant reduction in cash and retained earnings accounting.
• A range of 32-52 percent is viewed as stable and fair from the standpoint of dividend investors.
• A company that pays out nearly half of its revenues in dividends is likely to be famous and a dominant player.

Equity shares signify the ownership of a company and capital raised by the issue of such shares is called as ownership capital or owner’s funds. They are the basis for the creation of a company.

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