Accounting Multiple Choice Question – 26 December 2020

A company is financed by: 

1. 10,000 £1 ordinary shares
2. £5,000 10% loan

Net profit before interest and taxation is £2,500. 

Tax payable is £400. 

What is the maximum dividend per share payable from this year’s profits? 

Select ONE answer:

1. £0.16
2. £0.20
3. £0.21
4. £0.25

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct — (£2,500 – (£5,000 *0.1) – £400) / 10,000 = £0.16
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.