LessonsEquity Funds: Purification and Fund ManagementQuiz

Suppose 5% of a company’s total income came from interest-bearing deposits. If an investor receives a dividend, the same 5% proportion of that dividend should be removed and given to charity under the purification approach described.

The calculation follows the prohibited-income ratio rather than an arbitrary amount.

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A Simple Dividend Example

Equity Funds: Purification and Fund Management

Suppose 5% of a company’s total income came from interest-bearing deposits. If an investor receives a dividend, the same 5% proportion of that dividend should be removed and given to charity under the purification approach described.

The calculation follows the prohibited-income ratio rather than an arbitrary amount.