EXPLAIN THE FEATURES OF PREFERENCE SHARES.

Meaning: - Preference shares are those shares which enjoy a preferential right as to the payment of dividend at a fixed rate throughout the lifetime of the company and as to the repayment of capital on winding up of the company. They enjoy preference over equity shares. In short, equity shares are paid only after the claims of preference shares are satisfied.

1.       Fixed annual dividends                  

2. Return of capital in the event of winding up of the company.

Although, the preference shareholders enjoy the above preferences, they do not enjoy normal voting rights. They are entitled to vote only on those matters that affect their interests. The maximum rate of dividend permissible is 14 percent per year.

Features of Preference shares are as follows:

1.       Preferential treatment: - The Preference shareholders get a preference for dividend. They enjoy a preference for payment of dividend. They enjoy a Preference for payment of dividend over the equity shareholders.

2.       Fixed rate of Dividend: -The Preference shareholders get a regular dividend. The Dividend rate is fixed. The rate of dividend varies from one company to that of another.

3.       Voting Rights: -holders of preference shares do not have normal voting rights like equity shares. However, they can vote on any such matter which is directly affects their interest as investors

4.       Face Value: - Compared to equity share, face value of Preference shares is high. they are normally issued for a value of Rs. 100/-

5.       Preference for Repayment of Capital: -The Preference shareholders get Preference in repayment of capital over the equity shareholders at the time of winding up of the company.

6.       Redeemability of shares: - As per the Companies (Amendment) Act, 1988, a company cannot issue irredeemable preference shares. In other words, preference shares are to be redeemed (paid back) after certain period of time.

7.       Nature of Capital: -The Preference shares are to be redeemed after a certain period of time. Therefore, unlike equity shares, they do not provide permanent share capital.

8.       Capital Appreciation: -The Capital appreciation is low as compared to equity shares of profitable companies.


9.       Bonus Shares: - Preference Shareholders are not entitled for the issue of bonus shares if issued by the company. They are also not entitled for ‘Right Issue of Shares’.

No comments:

PDF FILE TO YOUR EMAIL IMMEDIATELY PURCHASE NOTES & PAPER SOLUTION. @ Rs. 50/- each

SSC MATHS I PAPER SOLUTION

SSC MATHS II PAPER SOLUTION

SSC SCIENCE I PAPER SOLUTION

SSC SCIENCE II PAPER SOLUTION

SSC ENGLISH PAPER SOLUTION

SSC & HSC ENGLISH WRITING SKILL

HSC ACCOUNTS NOTES

HSC OCM NOTES

HSC ECONOMICS NOTES

HSC SECRETARIAL PRACTICE NOTES

You can also pay the necessary amount (Rs. 50 for Each Notes) to our UPI ID:

After paying Rs. 50 you will get your notes and paper solution either by email or through WhatsApp in PDF digital form.


If you are not certain how this will work then please contact on this number: 8169449238 (Only WhatsApp) No personal Calls allowed. All the best for upcoming Board Exam.


2019 Board Paper Solution

HSC ENGLISH SET A 2019 21st February, 2019

HSC ENGLISH SET B 2019 21st February, 2019

HSC ENGLISH SET C 2019 21st February, 2019

HSC ENGLISH SET D 2019 21st February, 2019

SECRETARIAL PRACTICE (S.P) 2019 25th February, 2019

HSC XII PHYSICS 2019 25th February, 2019

CHEMISTRY XII HSC SOLUTION 27th, February, 2019

OCM PAPER SOLUTION 2019 27th, February, 2019

HSC MATHS PAPER SOLUTION 2nd, March, 2019

SSC ENGLISH STD 10 5TH MARCH, 2019.

HSC XII ACCOUNTS 2019 6th March, 2019

HSC XII BIOLOGY 2019 6TH March, 2019

HSC XII ECONOMICS 9Th March 2019

SSC Maths I March 2019 Solution 10th Standard11th, March, 2019

SSC MATHS II MARCH 2019 SOLUTION 10TH STD.13th March, 2019

SSC SCIENCE I MARCH 2019 SOLUTION 10TH STD. 15th March, 2019.

SSC SCIENCE II MARCH 2019 SOLUTION 10TH STD. 18th March, 2019.

SSC SOCIAL SCIENCE I MARCH 2019 SOLUTION20th March, 2019

SSC SOCIAL SCIENCE II MARCH 2019 SOLUTION, 22nd March, 2019


BUY FROM PLAY STORE

DOWNLOAD OUR APP



HOW TO PURCHASE OUR NOTES?




S.P. Important Questions For Board Exam 2020


O.C.M. Important Questions for Board Exam. 2020


Economics Important Questions for Board Exam 2020


Chemistry Important Question Bank for board exam 2020


Physics – Section I- Important Question Bank for Maharashtra Board HSC Examination


Physics – Section II – Science- Important Question Bank for Maharashtra Board HSC 2020 Examination


MUST REMEMBER THINGS on the day of Exam


Are you prepared? for English Grammar in Board Exam.


Paper Presentation In Board Exam


How to Score Good Marks in SSC Board Exams


Tips To Score More Than 90% Marks In 12th Board Exam


How to write English exams?


How to prepare for board exam when less time is left


How to memorise what you learn for board exam