Computation of Dividend

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This discussion clarifies how company dividends are calculated. Dividends are legally and accounting-wise determined based on the face value or paid-up capital of shares, not their market value. Section 51 of the Companies Act, 2013, along with the company's Articles of Association, governs this process.

abhijit majumder

abhijit majumder (Querist)
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03 August 2026 Sir
Dividend is a portion of profit that will be distributed among the shareholders.
My query is % of Dividend calculated on which amount ie
A) Face value of share(ie paid up capital)
or
B) Market value of the share
Is there any explicit legal and/or accounting guidelines on this regard?
Regards
Abhijit

Aashok Kumar Sharma online

Aashok Kumar Sharma

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03 August 2026 Correct Basis: Calculated on Face Value / Paid-up Capital.

Governing Provision: Section 51 of the Companies Act, 2013 (read with Table F / Company's Articles of Association).

Market Value: Unrelated to corporate dividend declaration; used only by investors to calculate Dividend Yield.

abhijit majumder

abhijit majumder (Querist)
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04 August 2026 Sincere thanks to Sir Aashok Kumar Sharma for clarify my doubt on Dividend .
Regards
Abhijit

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