Question

12. Mayank has surplus money of Rs.

25,00,000, which he wants to invest either in equity shares or in preference shares. Two real estate companies (Magic Estate and Skylark Enterprises), with almost the same creditworthiness, are launching their public issue. Magic Estate is coming up with a public issue of preference shares, while Skylark Enterprises is coming up with equity shares. Mayank is confused about the two issues. He consulted his friend Gaurav, who is a portfolio manager and Gaurav convinced him to invest the money in Magic Estate due to 'Preferential Rights' of preference shareholders over equity shareholders. State the 'Preferential Rights' stated by Gaurav, which convinced Mayank to invest in Magic Estate.​

Answer 1

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CBSE

Class 11

Business Studies

Mayank has surplus money of 25 …

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Mayank has surplus money of 25 lakhs which he wants to invest either in equity shares or preference shares . Two pharmaceutical companies with almost same creditworthiness are launching their public issues. One has issued equity shares and the other has issued preference shares.He consulted his friend Manish who is a portfolio manager who suggested him to invest in equity shares. State the reasons which Manish would have given to Mayank to invest in equity shares.

Answer 2

Explanation:

25,00,000, which he wants to invest either in equity shares or in preference shares. Two real estate companies (Magic Estate and Skylark Enterprises), with almost the same creditworthiness, are launching their public issue. Magic Estate is coming up with a public issue of preference shares, while Skylark Enterprises is coming up with equity shares. Mayank is confused about the two issues. He consulted his friend Gaurav, who is a portfolio manager and Gaurav convinced him to invest the money in Magic Estate due to 'Preferential Rights' of preference shareholders over equity shareholders. State the 'Preferential Rights' stated by Gaurav, which convinced Mayank to invest in Magic Estate