Question

Which of the following rights may be given to preference shareholder if provided by Articles?

• A. To participate in the surplus remaining after the equity shares are redeemed in winding up.
• B. To participate in the surplus profits remaining after payment of equity dividend.
• C. To receive arrears of dividend at the time of winding up.
• D. All of the above.

Answer 1

Answer: (D)

All of the above.

If provided by the Articles of Association, the following rights may be given to the shareholders of preferential shares are:
To participate in the surplus profits remaining after payment of equity dividend

To receive arrears of dividend at the time of liquidation

To receive premium on redemption of preference shares.