Arrange following in a sequence to determine the residue available for Equity Shareholders of a company.
A. Profit after Interest before Tax and Dividend
B. Preference Dividend paid
C. Profit after Interest and Tax before Dividend
D. Tax paid
E. Profit after interest, Tax and Dividend
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → A, D, C, B, E
The residue for equity shareholders is reached by taking off tax first and then the preference dividend:
A. Profit after Interest before Tax and Dividend – the starting figure (profit before tax).
D. Tax paid – deducted from it.
C. Profit after Interest and Tax before Dividend – the profit after tax.
B. Preference Dividend paid – preference shareholders are paid before equity shareholders.
E. Profit after interest, Tax and Dividend – what is left belongs to the equity shareholders.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
