Big doubt............?

if  i open a company  ,issue a shares to u FV = 10 and u ve paid only 6 ,and i issue dividend at 10 % in mean time..why wil i pay u on something which  u ve not invested..thus paid up value...

ITS ON PAID UP VALUE DEAR.

SUPPOSE FACE VALUE IS Rs100 AND PAID UP VALUE IS Rs20. RATE OF DIV. IS 10%.

THINK LOGICALLY : - CO. WILL PAY U DIVIDEND ON THE AMOUNT U HV CONTRIBUTED TILL DATE AS CAPITAL  i e ON Rs20   OR    THE AMOUNT WHICH U HV STILL NOT PAID i e RS100.

OFCOURSE CO WILL PAY ON Rs20 @ 10% i e Rs2.

WHEN U WILL PAY NEXT CALL OF SAY Rs40 THEN UR TOTAL PAID UP VALUE WILL BE Rs60 AND DIV WILL BE BASED ON Rs60 @ 10% i e Rs6.

hope its clear now!!!!!!!!!!!!!!

Your doubt is easy to get resolved. The above answers are good enough to resolve the query.
Thanks guys for responding so nicely :))

Keep sharing the knowledge :))

@ Ekta ....Its On Paid Up Capital......................

Answer given by sameer....is very good...and enough to solve ur big doubt..

ekta 100% sure, dividend is paid on paid up value only

Now one more question arise...if share are issued at discount or at premium....????then

eg. face value 100

issue price 90 or 110

then prem @ 10% will be calculated on ......or........??????????

Dear Friends,

Nicely Explained.......

Thanks.......

i also take classes fron praven sharma and i will be absolutely on paid up value ..above reasons are enough to resolve ur query

paid up value

Dividend on face value only if paid up and face value are same..otherwise it should be on paid up value.

The logic is already very well explained that you should get dividend on your amount paid towards capital as investment in share and not on the entire face value of share.