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WHAT DO U MEAN BY DIVIDENDS. WHAT IS THE TYPE OF DIVIDEND
AND IS THIS PROFIT OR INTREST?
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Answer Posted / kee-kee
Divident is a portion of the net profit of a joint stock company. which a shareholder is entitled to receive when it is formally declared in the general meeting of shareholders. Divident is paid only out of divisible profits of the company, which is left after making necessary provisions. However, the term "dividend has the following two meanings.
1. In case of a going concern : Diviend is a share of profit distributed to the shareholders in proportion to the shares held by them.
2. In case of winding up : Dividend means a division of the realized assets among the creditors and contribution according to their respective rights.
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