Question

Which shareholders have a right to receive the arrears of dividend from future profits ______.

Options

• Redeemable Preference Shares

• Participating Preference Shares

• Cumulative Preference Shares

• Non-Cumulative Preference Shares

Answer 1

Which shareholders have a right to receive the arrears of dividend from future profits Cumulative Preference Shares.

Explanation:

Cumulative preference shareholders have the right to receive unpaid dividends (arrears) from previous years out of future profits, before any dividend is paid to equity shareholders. This means if the company fails to pay dividends in a particular year due to low or no profits, the unpaid amount accumulates and must be paid in the future when profits are available.