Stocks and Shares Practice Test 1

Reserve fund =

20

100

×3,00,000 = Rs 60,000
Profit to be distributed = 3,00,000 - 60,000 = 2,40,000
Annual dividend for 6% cumulative preference shareholders =

6

100

×15,00,000=90,000
This needs to be paid for 2 years (last year and current year) as the preference shares are cumulative and the last year’s dividend was not paid.
∴ Total Dividend paid to preference shareholders = 2 × 90,000 = 1,80,000/-
Now, dividend to be paid to preference share holders = 2,40,000-1,80,000 = Rs 60,000
∴ Rate of dividend =

60000

3000000

×100=2
∴ The rate of dividend to the equity shareholders is 2%.