Question

For a joint stock company, payment of dividend is

• A. Voluntary
• B. Compulsory
• C. Necessary
• D. None of these

Hint:

Dividend payments are voluntary decisions made by a company's board, depending on its profitability and financial strategy.

Answer 1

The Correct Option is A

Step 1: Understanding dividend payment in a joint stock company.
In a joint stock company, the payment of dividends is not a mandatory requirement by law. It is decided by the company's board of directors based on the company's profits and financial condition. Dividends are voluntary payments made to the shareholders out of the company's profits.
Step 2: Analyzing the options.
(A) Voluntary: Correct. The payment of dividends is voluntary, meaning that the company is not legally bound to distribute dividends every year.
(B) Compulsory: Incorrect. Dividend payments are not compulsory in a joint stock company. The company may choose to retain earnings for growth or other purposes.
(C) Necessary: Incorrect. Dividends are not necessary payments but are based on the company's discretion.
(D) None of these: Incorrect. The correct answer is (A).
Step 3: Conclusion.
The payment of dividend is voluntary in a joint stock company. Thus, the correct answer is (A).