what preferntial rights are enjoyed by preference shareholders over equity shareholders
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The following preferential rights are enjoyed by preference shareholders
(i) Receiving a fixed rate of dividend, out of the net profits of the company, before any dividend is declared for equity-shareholders.
(ii) Preference over equity shareholders in receiving their capital after the claims of the company’s creditors have been settled, at the time of liquidation.
(iii) In case of dissolution of the company, preference share capital is refunded prior to the refund of equity share capital.
(i) Receiving a fixed rate of dividend, out of the net profits of the company, before any dividend is declared for equity-shareholders.
(ii) Preference over equity shareholders in receiving their capital after the claims of the company’s creditors have been settled, at the time of liquidation.
(iii) In case of dissolution of the company, preference share capital is refunded prior to the refund of equity share capital.
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Answer:
The preferential rights enjoyed by preference shareholders are :
I) preference over equity shareholders in the payment of dividend .
ii) preference in the repayment of their investment during winding up .
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