Does Paid Dividend Come Out Of Net Profit?


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Aisha Profile
Aisha answered
Yes it does. You get the net profit after paying the interest and taxes. The residual profit is now divided for the preferred and the common dividends. The income that is left even then is called the retained earning.
thanked the writer.
Anonymous commented
What if your net profit is in the negative? How do you pay the preferred and common dividends? Can it be taken from the stated capital or capital surplus?

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