GENERAL KNOWLEDGE

Detailed explanation-1: -Capital dividend definition refers to the amount companies pay investors as dividends by drawing out money from shareholders’ equity instead of taking out the funds from its profits. Typically, a company only makes this payment when it cannot generate sufficient profits to cover the regular dividend payments.

Detailed explanation-2: -Though dividends are not specifically shown in shareholder’s equity, their impact flows through shareholder’s equity as it reduces the shareholder’s equity amount on the balance sheet.

Detailed explanation-3: -The dividend is calculated as a percentage of capital of the company.