BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Dividend is that portion of profit which is distributed to shareholders. The decision involved here is how much of the profit earned by company (after paying tax) is to be distributed to the shareholders and how much of it should be retained in the business. Was this answer helpful?

Detailed explanation-2: -A decision has to be taken whether all the profits are to be distributed, to retain all the profits in business or to keep a part of profits in the business and distribute others among shareholders. The higher rate of dividend may raise the market price of shares and thus, maximize the wealth of shareholders.

Detailed explanation-3: -Capital profits can be used for distribution of dividend if .

Detailed explanation-4: -A dividend is the distribution of a company’s earnings to its shareholders and is determined by the company’s board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

Detailed explanation-5: -Sec 115 BBDA of the Income-tax Act 1961, If the person resident in India is receiving the dividends in aggregate exceeding ten lakh rupees from a domestic company or companies then he will be liable to the taxes as follows: 10% on exceeding ten lakh rupees plus surcharge. 4 % as health and education cess. Bonus shares.