Question

A business company makes a net profit of Rs 80,00,000 in a year. The Board of Directors declares 12% cash dividend from the net profit. If the company has sold 000 shares, answer the following questions. i) Find the total cash dividend. (ii) Find the dividend for each share.​

Answer 1

The total cash dividend declared by the company is Rs 9,60,000, and the dividend per share is Rs 960. These figures are obtained by applying the percentage of the declared dividend to the net profit and dividing by the number of shares respectively.

Step-by-step explanation:

The student asked two questions related to cash dividends: (i) the total cash dividend declared by a company, and (ii) the dividend per share. To solve these questions, we use the given figures of the company's net profit and the percentage for the cash dividend:

• Total net profit: Rs 80,00,000
• Percentage for the cash dividend: 12%
• Number of shares sold: 1000 (as indicated by '000')

To calculate the total cash dividend:

• Multiply the net profit by the percentage of the cash dividend:
  Rs 80,00,000 * 12% = Rs 9,60,000.

To find the dividend per share:

• Divide the total cash dividend by the number of shares:
  Rs 9,60,000 / 1000 shares = Rs 960 per share.

A cash dividend is a direct payment made to shareholders, serving as a form of return on their investment. The dividend per share is the amount each share receives when the dividend is distributed.

Answer 2

(i) To find the total cash dividend, we need to calculate 12% of the net profit.

12% of Rs 80,00,000 = (12/100)*80,00,000 = Rs 9,60,000

Therefore, the total cash dividend is Rs 9,60,000.

(ii) To find the dividend for each share, we divide the total cash dividend by the total number of shares.

Dividend per share = Total cash dividend / Total number of shares

As the number of shares is not given in the question, we cannot find the exact dividend per share. However, if we assume that the company has sold 1000 shares, then the dividend per share would be:

Dividend per share = Rs 9,60,000 / 1000 = Rs 960

Therefore, the dividend for each share would be Rs 960 if the company has sold 1000 shares.