Bello Plc has an authorized share capital of 800,000 ordinary shares of ₦1 each, out of which 400,000 ordinary shares are fully issued and paid up. If the directors propose a final dividend of 12% on the paid-up capital, what is the total amount payable as dividends to the ordinary shareholders?
Answer: 48000 ₦
Answer
The total amount payable as dividends to ordinary shareholders is ₦48,000.
Dividends are declared and paid exclusively on issued and paid-up capital. With 400,000 issued and fully paid shares at ₦1 per share, the paid-up capital equals ₦400,000. A 12% dividend on ₦400,000 yields ₦48,000.
Step-by-Step Solution
Key Concept
Dividend Calculation on Paid-Up Share Capital
Estimated Time:45s