Question

Q. Madhu Ltd. is a company manufacturing garments for children. It has
been consistently earning good profits for many years. This year too ,it
has been able to generate enough profits. There is availability of
enough cash in the company. It believes in quality of product, equall
employment opportunities & good remuneration. It has many share.
holders who prefer to receive a fixed & regular income. Mohan is one of
such shareholders.
i) Which type of shares Mohan holds.
ii) Identify two values followed by the company.​

Answer 1

1. prefrance shares....

Answer 2

Preference shares are the type of shares that Mohan holds.

Explanation:

• i) Those investors who prefer to have a fixed and regular income invest in preference shares.
• Preference shares are the shares that are given preference during the division of dividends in comparison to other shareholders.
• ii) Two values followed by the company are:-
• 1. Consistent earnings: The company is consistently earning good profits for many years and hence is much more capable of paying higher dividends to shareholders.
• 2. Growth prospect: The company is focusing on the quality of the product which leads to fulfilling the social objectives of the company. The company is providing employment opportunities and good remuneration fulfills human objectives and leads to the overall growth of the company.