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Why dividend is not received on rights share?


Sivaranjani PC

Sivaranjani PC

CA Inter

0

04-Apr-20

83

Answers (7)

If dividend is for the year let's say 2018-19 and rights shares are issued in FY 2019-20 then even though company pay dividend in 2019-20 it will exclude right shares because on 31st March 2019 these right share were not existed ...


Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

04-Apr-20

Thank you for explanation


Thread Starter

Sivaranjani PC

Sivaranjani PC

CA Inter

0

04-Apr-20

It purely depends on the cut-off date or record date. Also sometimes the share issue agreement may provide for payment/non payment of dividend.


Suraj Lakhotia

Suraj Lakhotia

Admin

04-Apr-20

Chandan Subudhi

If dividend is for the year let's say 2018-19 and rights shares are issued in FY 2019-20 then even though company pay dividend in 2019-20 it will exclude right shares because on 31st March 2019 these right share were not existed ...

It depends on record date. Not whether shares existed in the previous year or not. Dividend is paid on shares outstanding on a particular date.


Suraj Lakhotia

Suraj Lakhotia

Admin

04-Apr-20

Okay sir


Thread Starter

Sivaranjani PC

Sivaranjani PC

CA Inter

0

05-Apr-20

Suraj Lakhotia Admin

It purely depends on the cut-off date or record date. Also sometimes the share issue agreement may provide for payment/non payment of dividend.

Sir for example : In FY 2020-21 Company declare dividend for FY 2019-20 . And set 1st October 2020 as cut off date . On 31st March 2020 share capital was 30 Lakh and on 1st and on 1st October 2020 share capital was 40 lakh . Dividend rate is 10% . Then what will be the total amount of dividend to be distributed ?


Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

27-May-20

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