Rate of dividend on preference shares is higher than the rate of interest on debentures.

True

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

False

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

Suggest Corrections

Similar questions

Payment of fixed rate of dividend to preference shares may enable a company to declare higher rates of dividend for the equity shareholders in good times.

Q. If DFL of a firm is 1.61 EBIT is Rs.25,000 and the interest component is Rs.7,000 the dividend on preference shares that the firm paid assuming a tax rate of

30 %

is ____________.

Differentiate between equity shares and preference shares on the basis of :

(a) Payment of dividend

(b) Refund of capital

(d) Voting Rights

Banks charge a higher interest rate on loans than what they offer on __________.

Join BYJU'S Learning Program