Why are dividends issued on the paid up equity share capital of the Company https://i.imgur.com/0yyIBKD.png and not on the total equity of the company https://i.imgur.com/yQmz3IF.png ? Basically the equity is what shareholders own (Assets - Liabilities).
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Why are dividends issued on the paid up equity and not on the total equity of the company?
Replies (1)
All equity has reserves and retained earnings included in it. That is why dividend is for share capital holder who fully paid up for shares
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