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Question
Preference shares may be ______.
Options
Secured or unsecured
Convertible or non-convertible
Cumulative or non-cumulative
Participating or non-participating
Solution
Preference shares may be cumulative or non-cumulative and participating or non-participating.
Explanation:
Preference shares may be cumulative or non-cumulative, redeemable or irredeemable, participating or non-participating, etc.
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RELATED QUESTIONS
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The term 'redeemable' is used for ______.
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The directors of a company have decided to modernise the plants and machinery at an estimated cost of Rs. one crore, but could not decide whether to issue preference shares or debentures for this purpose. As finance manager of the company, advise the directors whether to issue preference shares or debentures in the interest of the company.
Dividends on cumulative preference shares go on accumulating unless paid.
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Explain the disadvantages of preference shares.
