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Question
Justify the following statement.
Preference shares do not carry any voting rights.
Solution
Justification:
- Preference Shares are those shares which enjoy certain privileges and preferential rights over equity shares. The person holding preference share is known as 'Preference Shareholder'.
- Preference Shareholders do not have normal voting rights like equity shares.
- However, they can vote on any such matter which directly affects their interest as investors.
- Thus, it is rightly justified that, preference shares do not carry any voting right.
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