The following statements apply to equity preference shareholders Which one of them applies only to p...........

General Accounting Principles Accounting for Shares

The following statements apply to equity/preference shareholders. Which one of them applies only to preference shareholders?

Shareholders risk the loss of investment

Shareholders bear the risk of no dividends in the event of losses

Shareholders usually have the right to vote

Dividends are usually given at a set amount in every’ financial year

All of the above

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Explanation:

A Company can issue two types of shares viz. Equity Shares and Preference Shares. Equity shares are also known as Ordinary Shares. While Preference shareholders enjoy the benefit of receiving their dividend distribution first; the equity shareholders enjoy voting rights in major company decisions, including mergers or acquisitions. Preference shares have the right to receive dividend at a fixed rate before any dividend is paid on the equity shares. Further, when the company is wound up, they have a right to return of the capital before that of equity shares.