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Outline the classification of preference shares.

      

Outline the classification of preference shares.

  

Answers


Lellah
1. Redeemable preference shares - these shares are bought from their holders after a specified minimum period of time but before the expiry of a specified maximum period of time.
2. Irredeemable preference shares - these shares are not redeemed by the issuing company except at liquidation.
3. Cumulative preference shares - these shares receive dividend in arrears.
4. Non cumulative preference shares - these shares earn dividend only if the company makes a profit.
5. Participative preference shares - these shares are entitled to receive more than fixed rate of return in the event of high profits of high asset values.
6. Non participative preference shares - these shares cannot claim anything over and above their fixed claim.
Lellah answered the question on November 8, 2021 at 07:35


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