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preference shares

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › preference shares

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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  • January 14, 2017 at 6:10 am #366386
    aamir2111
    Participant
    • Topics: 123
    • Replies: 85
    • ☆☆☆

    Dear John,

    According to lecture notes, “….preference shares are not secured against company’s assets.”

    What if a company goes into liquidation, all its creditors have been settled, then what happens to the remaining assets?
    Do they go straight to the equity share holders or do the prefernece share holders (both cummulative & not cummulative) have right to claim their dividend out of proceeds from sale of these assets?

    January 14, 2017 at 8:38 pm #366536
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    Preference shareholders come before ordinary shareholders if the company goes into liquidation.

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