n NISM Certifications
X NISM Series X
Medium

Which payments are considered as deemed dividends in the hands of the recipient?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Distribution out of profits on capital reduction

  2. B

    Loan or advance from a closely held company out of profits

  3. C

    Distribution on liquidation out of profits

  4. Bonus shares issued out of profits

    Correct answer

Why this is the answer

Bonus shares are not deemed dividends; distributions out of accumulated profits or loans to shareholders are deemed dividends.

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