Q43
In which of the following, interest / dividend is payable even if the company does not earn profit?
A.
Equity capital
B.
Preference capital
C.
Debentures
AnswerD.
All of above
Answer: Option C
Solution
Answer: Option C
Solution:
In Debentures, interest / dividend is payable even if the company does not earn profit. No matter what happens – profit or loss, a firm needs to pay interest to its debenture holders/lenders. Only when a company makes a profit, a dividend is distributed.