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Preference shareholders have ______
  • a)
    preferential right as to dividend only
  • b)
    preferential right in the management
  • c)
    preferential right as to repayment of capital at the time of liquidation of the company
  • d)
    preferential right as to dividend and repayment of capital at the time of liquidation of the company
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Preference shareholders have ______a)preferential right as to dividend...

Preference shareholders have preferential right as to dividend and repayment of capital at the time of liquidation of the company

Preference shareholders are a class of shareholders who have certain preferential rights over equity shareholders. These rights include:

Preferential right as to dividend
- Preference shareholders have a preferential right to receive a fixed rate of dividend before any dividend is paid to equity shareholders.
- This means that the company must pay dividends to preference shareholders before distributing any profits to equity shareholders.

Preferential right as to repayment of capital at the time of liquidation of the company
- In the event of liquidation of the company, preference shareholders have a preferential right to receive back their capital before any payments are made to equity shareholders.
- This means that preference shareholders have a higher claim on the company's assets in case of liquidation, which provides them with a level of security.

Conclusion
Overall, preference shareholders have preferential rights as to both dividend payments and repayment of capital at the time of liquidation. These rights make preference shares an attractive investment option for investors looking for a more secure and stable form of investment compared to equity shares.
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Preference shareholders have ______a)preferential right as to dividend onlyb)preferential right in the managementc)preferential right as to repayment of capital at the time of liquidation of the companyd)preferential right as to dividend and repayment of capital at the time of liquidation of the companyCorrect answer is option 'D'. Can you explain this answer?
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Preference shareholders have ______a)preferential right as to dividend onlyb)preferential right in the managementc)preferential right as to repayment of capital at the time of liquidation of the companyd)preferential right as to dividend and repayment of capital at the time of liquidation of the companyCorrect answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Preference shareholders have ______a)preferential right as to dividend onlyb)preferential right in the managementc)preferential right as to repayment of capital at the time of liquidation of the companyd)preferential right as to dividend and repayment of capital at the time of liquidation of the companyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Preference shareholders have ______a)preferential right as to dividend onlyb)preferential right in the managementc)preferential right as to repayment of capital at the time of liquidation of the companyd)preferential right as to dividend and repayment of capital at the time of liquidation of the companyCorrect answer is option 'D'. Can you explain this answer?.
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