________will be entitled to receive arrears of their dividend.

Cumulative Preference Share

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Non-Cumulative Preference Share

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Convertible Debenture

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All of the above

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Solution

The correct option is A Cumulative Preference Share
A preference share is said to be cumulative when the arrears of dividend are cumulative and such arrears are paid before paying any dividend to equity shareholders including those that were omitted in the past, before the common shareholders are able to receive their dividend payments.

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Similar questions

Q. The authorised capital of M Ltd. consists of both cumulative preference shares and equity shares. Each

5

% cumulative preference share has a par value

R s . 100

. Each equity share has a par value

R s . 10

. During the year

2005 - 06

, the cumulative preference share capital was

R s . 2, 00, 000

If dividend declarations totalled

R s . 25, 000

in the year

2005 - 06

, the dividends allocated to the equity shareholders in the year

2005 - 06

will be ___________.

Under which head and how are the following items shown in the Balance Sheet of a company under Schedule III:

(i) Calls-in-Arrears; (ii) Share Application Money Pending Allotment; (iii) Unpaid Dividend; and (iv) Dividend not paid on Cumulative Preference Shares?

Q. The authorized capital of CAS Ltd. consists of both cumulative preference shares and equity shares. Each 5% cumulative preference share has a par value Rs 100. Each equity share has a par value Rs 10. During the year the cumulative preference share capital balance was Rs 4,00,000 and the equity share capital balance was Rs 10,00,000
If dividend declarations totalled Rs 16,000 and Rs 30,000 in the previous year and current year respectively, the dividends allocated to the equity share holders in the current year = ?

Q. Preference shareholders are entitled to a fixed rate of _________.

Q. Cumulative Preference Share is one on which __________________.

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