Multiple Choice Questions on Preference shares will carry preferential right with respect to ........ for SEBI Grade A ( Officer) Exam Preparation

Share capital and debentures

Companies Act-Phase (I & II)

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Study Notes

    Preference shares will carry preferential right with respect to-

    Payment of dividend before interest to debenture holders

    Incorrect Answer

    Payment of dividend before payment to equity Share holders In the form of dividend

    Incorrect Answer

    Repayment of capital during the event of winding up

    Incorrect Answer

    Both b and c 

    Correct Answer
    Explanation:

    Please note that preference shareholders have preferential right over the Equity share holders only they will not affect any others Rights.

    Preference shares are those which carry preferential right in respect of both dividend and repayment of capital. Preference shares, more commonly referred to as preferred stock, are shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued.


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