Question

Preference shareholders have ______.

Options

• Preferential right as to dividend only

• Preferential right in the management

• Preferential right as to repayment of capital at the time of liquidation of the company

• Preferential right as to dividend and repayment of capital at the time of liquidation of the company

Answer 1

Preference shareholders have Preferential right as to dividend and repayment of capital at the time of liquidation of the company.

Explanation:

Preference shareholders have:

1. A preferential right to receive dividends before equity shareholders.
2. A preferential right to the repayment of capital in case of winding up of the company, before any payment is made to equity shareholders.