Question

The profit of Kriti Ltd. is ₹ 90,000 for the current financial year. Study the data of Kriti Ltd. given below and answer the question that follows.

Security	Yield
Interest on Debenture	₹ 10,000
Dividend on Preference shares	₹ 10,000
Dividend on Equity shares	₹ 30,000

______ and equity shareholders will have a share in ₹ 40,000.

Answer 1

Participating Preference Shareholders and equity shareholders will have a share in ₹ 40,000.

Explanation:

Only participating preference and equity shareholders have the right to share residual profits.