OMTEX CLASSES: DIVIDEND INTEREST

DIVIDEND INTEREST




DIVIDEND
INTEREST

1


2


3



4


5
Meaning
Monetary return offered to share holders is known as dividend
Rate
Dividend is paid at fixed rate to preference share holders and at fluctuating rate to equity shareholders.

Certainty(confidence) of returns
Dividend may or may not be paid regularly as it depends upon the availability of profits.
Priority in Payments
Dividend is paid after paying interest to creditors.

Interim Payment
Board of directors can declare interim dividend if authorised by Articles of Association.

Monetary return offered to creditors (i.e.) Debenture holders) is known as interest.

Interest is paid at fixed rate.



Interest is always paid irrespective of the profit earned by the company.

Interest is paid with highest priority i.e. before paying dividend.

There is no interim dividend. It is paid as per the terms.