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Questions and Answers
Which type of preference shares allows the dividend to accumulate if it is not fully paid?
Which type of preference shares allows the dividend to accumulate if it is not fully paid?
- Participating Preference Shares
- Cumulative Preference Shares (correct)
- Convertible Preference Shares
- Non-cumulative Preference Shares
What happens to the unpaid dividend on non-cumulative preference shares?
What happens to the unpaid dividend on non-cumulative preference shares?
- It gets carried forward to the next year
- It is paid out of profits of that year only
- It gets accumulated and paid in the future
- It is lost forever if not paid in a particular year (correct)
Which type of preference shares entitle the holders to participate in surplus profits?
Which type of preference shares entitle the holders to participate in surplus profits?
- Cumulative Preference Shares
- Redeemable Preference Shares
- Non-cumulative Preference Shares
- Participating Preference Shares (correct)
If a company does not make a profit in a particular year, what happens to the right to claim dividend on non-cumulative preference shares?
If a company does not make a profit in a particular year, what happens to the right to claim dividend on non-cumulative preference shares?
What does the term 'irredeemable' mean in relation to preference shares?
What does the term 'irredeemable' mean in relation to preference shares?
Which type of preference shares are always cumulative unless otherwise stated in the Articles of Association?
Which type of preference shares are always cumulative unless otherwise stated in the Articles of Association?
What is the primary characteristic of non-participating preference shares?
What is the primary characteristic of non-participating preference shares?
What distinguishes redeemable preference shares from irredeemable preference shares?
What distinguishes redeemable preference shares from irredeemable preference shares?
What is the key characteristic of convertible preference shares?
What is the key characteristic of convertible preference shares?
What happens if a company issues redeemable preference shares?
What happens if a company issues redeemable preference shares?
Under what condition are irredeemable preference shares payable?
Under what condition are irredeemable preference shares payable?
What are non-convertible preference shares not able to do?
What are non-convertible preference shares not able to do?
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