Question

Which of the following is not the feature of preference shares:

Options

• Provides fixed rate of return

• Provides voting rights

• Get preference in payment of dividend

• Art of owner’s capital

Answer 1

Provides voting rights

Explanation:

• Provide a fixed rate of return (dividend).
• Have preference over equity shares in dividend payment.
• Form a part of owners’ capital (share capital of the company).

But, preference shareholders usually do not have voting rights in the company’s general matters (unless their rights are affected). Hence, option (b) is not a feature of preference shares.