Question 50
Business FinanceThe founders' shares are usually referred to as deferred shares because the holders
- A.are entitled to cumulative dividends
- B.receive their dividends after other shareholders
- C.receive their dividends before other shareholders
- D.are not entitled to any dividends.
Show the answer and explanation
Answer: B (receive their dividends after other shareholders)
Explanation
Founders' shares are paid dividends only after preference and ordinary shareholders have been paid.