Question

Those preference shares which do not carry the right of share in excess profits are known as ______ preference shares.

• A. Irredeemable
• B. Non-cumulative
• C. Non-convertible
• D. Non-participating

Answer 1

The correct option is D Non-participating

Non participating preference shares are entitled to receive an amount equal to the initial investment plus the amount of unpaid dividend. Remaining amount are distributed to the common or equity shareholders.