Home › Bihar Board Class 12 (Commerce) › Business Studies › Sources of Business Finance › Why do preference shares give no tax saving?
Why do preference shares give no tax saving?
AThey carry interest
BDividend is not deductible
CThey are tax exempt
DThey bear no dividend
Answer & Solution
Correct answer: B. Dividend is not deductible
Dividend is paid out of profit after tax, so unlike loan interest it does not reduce taxable profit.
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