Question 9
Business FinanceWhich of the following is true about cumulative preference shares?
- A.Unpaid dividends are carried forward
- B.Shareholders can secure capital refund on demand
- C.Shareholders are entitled to further share of profit
- D.Dividends are paid into a special account
Show the answer and explanation
Answer: A (Unpaid dividends are carried forward)
Explanation
With cumulative preference shares, a dividend not paid in a bad year is carried forward and paid later.