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Question
What preferential rights are enjoyed by preference shareholders? Explain.
Solution
Preference shares are shares that provide the shareholders preferential rights regarding the repayment of capital and payment of dividends after a certain specified period of time. Preference shares are issued by a company to raise capital, and the repayment to preference shareholders is made in accordance with the terms specified in Section 80 of the Companies Act, 1956. Preference shareholders are entitled to the following preferential rights.
(a) Preference shares entitle their holders the right to receive dividends of a fixed amount or at a fixed rate.
(b) Preference shares entitle their holders the preferential right to receive repayment of capital invested by them before their equity counterparts at the time of winding up of the company.
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Multiple Choice Question:
The term 'redeemable' is used for
Match the pairs.
| Group 'A' |
Group 'B' |
|
a) Death of member |
1. Forfeiture of shares |
|
b) Voluntary return of shares to company by member |
2. Book Building Method |
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c) Price of shares mentioned in prospectus |
3. Offered to existing employees |
|
d) ESPS |
4. Surrender of shares |
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e) Regret Letter |
5. Transmission of shares |
|
|
6. Non-allotment of shares |
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7. Offered to existing Equity shareholders |
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8. Transfer of shares |
|
|
9. Fixed price issue method |
|
|
10. Allotment of shares |
Write a word or a term or a phrase which can substitute the following statement.
Capital collected by way of issue of Equity and Preference shares.
Write a word or a term or a phrase which can substitute the following statement.
Part of issued capital subscribed by investors.
Find the odd one.
Find the odd one.
Find the odd one.
Complete the sentence.
Shares issued free of cost to existing Equity shareholders is called as ______
Answer in one sentence.
With whom should the prospectus be filed before issuing it to the public?
Explain the following term/concept.
Bonus shares
Distinguish between the following:
Rights Shares and Bonus Shares
Justify the following statement.
To Issue Bonus Shares, a company has to fulfill certain provisions.
Match the pairs.
| Group A | Group B |
| a) Debenture holders | 1) Secured deposits |
| b) IPO | 2) Owners |
| c) Charge on assets | 3) Any issue after first-time public offer |
| d) SEBI | 4) To protect the interest of investors in securities market |
| e) Issued within two months of allotment of shares | 5) First-time public offer |
| 6) Allotment letter | |
| 7) To protect the interest of companies in securities market | |
| 8) Share certificate | |
| 9) Creditors | |
| 10) Unsecured deposits |
