DECLARATION AND PAYMENT OF DIVIDEND – MCQs and Questions

Section A – MCQ (10 MARKS) TOTAL:25 MARKS

1. Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which
matured four years back. However, 1000 such debentures of ? 100 each are still remaining
unclaimed and unpaid even after the maturity. State the period after which the company
needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain
unclaimed and unpaid.

(a) After the expiry of five years from the maturity date.
(b) After the expiry of six years from the maturity date
(c) After the expiry of seven years from the maturity date
(d) After the expiry of eight years from the maturity date.

2. Return paid on shares is___________

(a) interest (b) dividend (c) commission (d) none of the above

3. To enable a company to pay dividends, a special authority is_______.

(a) not needed either in the memorandum or in the articles

(b) needed either in the memorandum or in the articles
(c) needed only in the memorandum
(d) needed only in the articles.

4. Dividend on preference capital will be paid_________.

(a) at a fixed rate
(b) at a fluctuating rate
(c) once in two years
(d) even when the does not have profit

5. In which of the following, interest or dividend is payable even if the company does not earn profit?

(a) Equity capital (b) Preference capital. (c) Debentures. (d) Bonds

6. XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to transfer
unpaid dividend to bank account even after 40 days from declaration of Dividend. In such
case how much interest will be payable?

(a) 8%p.a. (b) 16%p.a. (c) 10%p.a. (d) 12%p.a.

7. The rate of dividend proposed by the board may be increased or reduced by the members. Is
the given statement is -
(a) True (b) False

8.Any money transferred to the Unpaid Dividend Account which remains unpaid for_________
from the date of such transfer shall be transferred by the company ,along with interest
accrued ,if any, to the investor Education and Protection Fund'

(a) 3 Years (b) 5 years (c) 7 years (d) 10 years

 9. The Central Government shall constitute ,by notification ,an authority for administration
of the Investor Education and Protection Fund consisting of a chair person and such other
members ,not exceeding_and a chief executive officer ,as the Central Government may
appoint

(a) 5 (b) 7 (c) 10 (d) 12

10. "Any money transferred to the Unpaid Dividend Account of a company which remains unpaid or
unclaimed for a period of seven years shall be transferred by the company to"
(a) Investor Education and Protection Fund

(b) Investor Protection and Education Fund

(c) Investor Protection Fund

(d) Fund established by Company for this purpose

SECTION B – 3 x 5 = 15

11. CASE STUDY

12.

13. Differentiate- Interim dividend and Final dividend.