Question : There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the prop rite option from the options given below
(A) Both Assertion (A) and Reason (R) are true, but 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 false, but Reason ( R ) is true.
(D) Assertion (A) is true, but Reason (R) is false.
Question:
Assertion (A): Equity shares do not carry a fixed rate of dividend and they are the ultimate risk bearer.
Reason (R): Equity shareholders are getting dividends from the residual part of profits and in the case of the windup of the company, invested money will be refunded at the last.
Option 1: A
Option 2: B
Option 3: C
Option 4: d
Correct Answer: A
Solution : Answer = (A) Both Assertion (A) and Reason (R) are true, but Reason (R) is the correct explanation of Assertion (A).
Equity shares indeed do not carry a fixed rate of dividend, and equity shareholders bear the ultimate risk because they receive dividends from the residual profits after other claims are settled, and they are repaid their invested capital only after all other claims are satisfied in the event of company liquidation.
Hence, the correct option is 1.