Question : Questions: Different Sources of Finance
Statement 1: Equity shares provide shareholders with fixed dividend payments.
Statement 2: Equity shareholders have priority in dividend distribution.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer:
Statement 1 is false, and statement 2 is true.
Solution : The correct answer is (b) Statement 1 is false, and statement 2 is true.
Statement 1 is false. Equity shares do not provide shareholders with fixed dividend payments. Dividends for equity shareholders are variable and depend on the company's profits and the decision of the board of directors.
Statement 2 is true. Equity shareholders have priority in dividend distribution after any obligations to preference shareholders have been met. If the company has profits available for distribution, equity shareholders receive dividends based on the company's dividend policy and the amount available for distribution.
Related Questions
Trending Articles/News
