The correct answer is: D. None of the above
A company can only pay dividends out of its distributable profits. Distributable profits are the profits that are available to be distributed to shareholders. They are calculated by taking the company’s net profit and then deducting any amounts that are required to be retained in the company, such as for future investment or to meet regulatory requirements.
Money provided by the government for such purpose is not considered to be distributable profits and cannot be used to pay dividends. Similarly, the share premium account is a reserve that is created when shares are issued at a premium above their nominal value. This reserve is also not considered to be distributable profits and cannot be used to pay dividends.
Therefore, the correct answer is D. None of the above.