Grade 11 Exam > Grade 11 Questions > The preference shares that can be converted i...
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The preference shares that can be converted into equity shares are known as
- a)Convertible preference shares
- b)Non convertible preference shares
- c)Non Participating preference shares
- d)Participating preference shares
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The preference shares that can be converted into equity shares are kno...
Convertible Preference Shares
Convertible preference shares are a type of preference shares that have the option to be converted into equity shares at a later date. These shares offer the preference shareholders the opportunity to participate in the company's growth and potential increase in share value.
Features of Convertible Preference Shares:
- Convertibility: Convertible preference shares can be converted into equity shares at the option of the shareholder.
- Conversion Ratio: The conversion ratio determines the number of equity shares that can be obtained by converting one preference share.
- Conversion Price: The conversion price is the price at which the preference shares are converted into equity shares.
- Conversion Period: Convertible preference shares have a specified period within which they can be converted into equity shares.
- Dividend Rights: Convertible preference shareholders are entitled to receive dividends before equity shareholders, but they may forego this right upon conversion.
Advantages of Convertible Preference Shares:
- Potential for Capital Appreciation: By converting preference shares into equity shares, shareholders can benefit from the potential increase in share value.
- Flexibility: Convertible preference shares offer flexibility to investors as they have the option to convert or continue holding the preference shares.
- Participation in Company Growth: Convertible preference shareholders can participate in the company's growth and success by converting their shares into equity and enjoying the benefits of ownership.
Conclusion:
Convertible preference shares provide investors with the option to convert their preference shares into equity shares, allowing them to potentially benefit from the company's growth and increase in share value. These shares offer flexibility and the opportunity to participate in the company's success, making them an attractive investment option for shareholders.
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Convertible preference shares are a type of preference shares that have the option to be converted into equity shares at a later date. These shares offer the preference shareholders the opportunity to participate in the company's growth and potential increase in share value.
Features of Convertible Preference Shares:
- Convertibility: Convertible preference shares can be converted into equity shares at the option of the shareholder.
- Conversion Ratio: The conversion ratio determines the number of equity shares that can be obtained by converting one preference share.
- Conversion Price: The conversion price is the price at which the preference shares are converted into equity shares.
- Conversion Period: Convertible preference shares have a specified period within which they can be converted into equity shares.
- Dividend Rights: Convertible preference shareholders are entitled to receive dividends before equity shareholders, but they may forego this right upon conversion.
Advantages of Convertible Preference Shares:
- Potential for Capital Appreciation: By converting preference shares into equity shares, shareholders can benefit from the potential increase in share value.
- Flexibility: Convertible preference shares offer flexibility to investors as they have the option to convert or continue holding the preference shares.
- Participation in Company Growth: Convertible preference shareholders can participate in the company's growth and success by converting their shares into equity and enjoying the benefits of ownership.
Conclusion:
Convertible preference shares provide investors with the option to convert their preference shares into equity shares, allowing them to potentially benefit from the company's growth and increase in share value. These shares offer flexibility and the opportunity to participate in the company's success, making them an attractive investment option for shareholders.
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The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer? for Grade 11 2025 is part of Grade 11 preparation. The Question and answers have been prepared according to the Grade 11 exam syllabus. Information about The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Grade 11 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer?.
The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer? for Grade 11 2025 is part of Grade 11 preparation. The Question and answers have been prepared according to the Grade 11 exam syllabus. Information about The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Grade 11 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer?.
Solutions for The preference shares that can be converted into equity shares are known asa)Convertible preference sharesb)Non convertible preference sharesc)Non Participating preference sharesd)Participating preference sharesCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Grade 11.
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