Question 18
Business FinancePreference shareholders are different from ordinary shareholders because
- A.preference shareholders are creditors to the company
- B.the number of shares held by preference shareholders is more
- C.preference shareholders take a fixed percentage of dividends
- D.the shares of preference shareholders cannot be sold on the stock exchange
- E.preference shareholders receive interest.
Show the answer and explanation
Answer: C (preference shareholders take a fixed percentage of dividends)
Explanation
Preference shares earn a fixed rate of dividend, while ordinary dividends vary with profit.