Question

Equity shareholders are entitled to _________.

• A. Fixed dividend
• B. Fixed interest
• C. $15$% dividend
• D. Dividend only when declared by the board of director

Answer 1

The correct option is D Dividend only when declared by the board of director

It is a company's board of directors who actually declares a dividend. The most important right that all Equity shareholders possess include the right to share in the company's profitability.

In addition to share in profits generated by the company, shareholders also have rights to income distributions through dividend payments. A company's board of directors must decide to pay the dividend and in what amount.

If a company's board of directors declares a dividend in a certain period, shareholders are in line to receive it.