Justify the following statement.The dividend is paid out of the profit – InterviewSolution

1.	Justify the following statement.The dividend is paid out of the profits of the company.
Answer» The dividend is the portion of profits of the company paid to its shareholders. It is payable out of profits of the company. Dividend can be paid out of capital profits on fulfilling these conditions. Capital Profits are realized in cash. Articles of Association of the company permit such a distribution. It remains as profits after revaluation of all assets and liabilities. Thus, it is rightly justified that dividend is paid out of profits of the company.

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