Question

. Riya invested in 300 preference shares of a company. As per the guidelines mentioned in the prospectus of the company, the shares are to be converted into equity shares after the duration of two years. After the conversion, each preference share of ₹100 will be equivalent to 10 equity shares of ₹10 each. a. Identify the type of preference shares that are owned by Riya.

b. calculate the number of Equity shares that ria will be holding after the conversion of shares takes place.

c. also discuss how her rights as a shareholder will get affected due to the conversion of the existing shares.

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Answer 1

Answer:

☘ 1) When iron nail is dipped in copper sulphate solution, a brown coating of copper is formed on the surface of iron and the colour of copper sulphate solution changes from blue to light green.

☘ 2) a. WEATHER - It is what conditions of the atmosphere are over a short period of time.

☘ 2) b. CLIMATE - It is how the atmosphere "behaves" over relatively long periods of time.

☘ 3) REASON - This is because magnesium oxide with water is basic in nature.

▪︎When the red litmus paper is dipped in basic solution,it turns from red to blue.

Answer 2

Answer :

Riya owns Convertible preference shares which will convert into 3000 equity shares after two years, conversion of preference shares to equity shares will affect Riya's rights as a shareholder in terms of dividends, voting rights, capital appreciation and liquidity.

Explanation :

a) The type of preference shares that Riya owns is Convertible preference shares.

b) After the conversion, Riya will be holding 3000 equity shares (300 preference shares * 10 equity shares per preference share)

c) Conversion of preference shares to equity shares will affect Riya's rights as a shareholder in the following ways:

• Dividend rights: Convertible preference shares come with a fixed dividend, but once they are converted, Riya will be entitled to the dividends of an equity shareholder, which may vary depending on the company's profits.

• Voting rights: Convertible preference shares do not come with voting rights, but once they are converted, Riya will have the rights to vote as an equity shareholder.

• Capital appreciation: Convertible preference shares do not provide any capital appreciation but once they are converted, Riya will be able to participate in the capital appreciation of the company as an equity shareholder.

• Liquidity: Convertible preference shares are less liquid than equity shares, so after the conversion, Riya will be able to trade her shares more easily.

It is also important to note that the conversion is subject to the guidelines mentioned in the prospectus of the company and it's also based on the management decision, if in any case, it doesn't happen then the rights remains the same as before.

To know more about the concept please go through the links :

https://brainly.in/question/18200777

https://brainly.in/question/37762931

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