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Question : A preference share which does not carry the right of sharing in surplus profit is called _________.

Option 1: Redeemable preference shares 

Option 2: Non redeemable preference shares 

Option 3: Non cumulative preference shares 

Option 4: Non-participating preference shares


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Non-participating preference shares


Solution : Answer = Non-participating preference shares

Non-participating preference shares get only a fixed rate of dividend every year and do not carry a right to participate in the surplus profits or in any surplus on winding up. Non-participating preference shares do not have the right to share in surplus profits beyond their fixed dividend. Unlike participating preference shares, they do not entitle shareholders to additional dividends beyond their predetermined rate. These shares typically offer a fixed dividend and do not participate in the surplus profits of the company.

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