Question 8
Business OrganisationsMost firms are financed by share capital. The shares which do not carry any fixed rate of dividend are known as
- A.debentures
- B.preference shares
- C.ordinary shares
- D.participating preference shares
- E.old shares.
Show the answer and explanation
Answer: C (ordinary shares)
Explanation
Ordinary shareholders receive whatever dividend the directors declare from profit; there is no fixed rate, unlike preference shares and debentures.