Multiple choice

The _____ are the shares on which the dividend accumulates if it remains unpaid for a particular year.

  1. convertible preference shares

  2. cumulative preference shares

  3. participatory preference shares

  4. preferred shares
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A preference share is said to be cumulative when the arrears of dividend are cumulative and such arrears are paid before paying any dividend to equity shareholders.

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