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The board recommends a dividend after the accounts for a completed financial year are prepared, and the members declare it at the annual general meeting. What kind of dividend is this?

Question and options

The board recommends a dividend after the accounts for a completed financial year are prepared, and the members declare it at the annual general meeting. What kind of dividend is this?

  1. Interim dividend

  2. Bonus dividend

  3. Deemed dividend

  4. Final dividend

Answer and explanation

Correct answer: D - Final dividend

A final dividend is recommended by the board for a completed financial year and declared by the members at the annual general meeting. An interim dividend is declared by the board itself during the year under section 123(3), and a deemed dividend is a tax concept, not a declaration under the Companies Act.

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