ExpertEasy1 markMultiple Choice
ACCA · Question 37 · Capital and the financing of companies
Section A
Which type of share typically carries a fixed rate of dividend that must be paid before any dividend is paid to other shareholders?
Section A
Which type of share typically carries a fixed rate of dividend that must be paid before any dividend is paid to other shareholders?
Answer options:
A.
Ordinary shares
B.
Deferred shares
C.
Preference shares
D.
Redeemable shares
How to approach this question
Identify the characteristics of different share classes.
Full Answer
C.Preference shares✓ Correct
Preference shares give the holder a preferential right to a fixed dividend (e.g., 5% of nominal value) before any dividend is declared on ordinary shares.
Common mistakes
Confusing preference shares with ordinary shares.
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