Multiple choice

Profit of a company is disposed off in the form of

  1. dividend on equity shares

  2. dividend on preference shares

  3. dividend on bonus shares

  4. dividend on debentures
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A Correct answer
Explanation

Profit of a company can be distributed either in the form of dividend to equity shareholders or issue of bonus shares. Since bonus shares themselves are a mode of distribution of profit, dividend on bonus shares is not a right term. Thus, profit of a company can be distributed as dividend to equity shareholders.

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