Distinguish Between · Q6
Q.Distinguish between Dividend and Interest (any four points).
Maharashtra MsbshseTextbookSubjectiveImportance★★★★★
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Start your 14-day free trial to unlock the full solution →| Basis | Dividend | Interest |
|---|---|---|
| Paid to | Shareholders (owners of the company) | Debenture-holders/depositors (creditors of the company) |
| Nature of payment | An appropriation of profit — paid out of profit already arrived at | A charge against profit — deducted as an expense in arriving at profit |
| Payable without profit? | No — restricted to the sources Section 123 allows | Yes — payable on the due date regardless of profit or loss |
| Rate | Variable for equity shares (decided afresh each year); fixed for preference shares | Always fixed, as agreed at the time the debentures were issued or the deposit accepted |
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