Multiple choice

In ______, there is facility that if the dividend payable is not paid, it will accumulate. In addition, the share will be exchanged with an equity share.

  1. redeemable preference share

  2. participating preference share

  3. cumulative convertible preference share

  4. irredeemable preference share

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Cumulative convertible preference shares are a type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.

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