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JAMB Economics 1989 Question 24

Question 24

Business Organisations

The type of business finance that entitles the holder to a fixed rate of dividend is

  1. A.preferred stock
  2. B.common stock
  3. C.debenture
  4. D.bank loan.
Show the answer and explanation

Answer: A (preferred stock)

Explanation

Preference shares carry a fixed rate of dividend. Debentures earn fixed interest, not dividends.