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Is dividend distributed from profit of company

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(Querist)
03 November 2024 whether dividend distributed from profit of company after profit after tax.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
03 November 2024 Yes. Dividends are usually paid out of the company's retained earnings, which are the profits left after taxes have been paid. This ensures that the company has sufficient profits to distribute to shareholders.
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