Question

what are the right of preference shareholders

Answer 1

Explanation:

Preference shares are those which have preferential rightto the payment of dividend during the life-time of thecompany and a preferential right to the return of capitalwhen the company is wound upPreference shares also have a right to participate or inpart in excess profits left after been paid to equityshares, or has a right to participate in the premium atthe time of redemption. But these shares do not carryvoting rights.

Answer 2

Answer:

1. they receive dividends much before equity shareholders.

2. they have higher claim on company assets than equity shareholders.

Suggestion:

If you are planning to invest in preference share, then I would suggest better to invest in debentures.