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hi sir ,
Which of the following statements are ture of preference share ?
1. they carry voting rights
2. their dividend is paid out of in priority to an ordinary dividend
3. their dividend is related to profitA. 2,3
B 2 onlyans is b . y 3. their dividend related to profit is wrong ?
for my understanding …preference share dividend is an appropriate of the profit .
am i rite ? thank you
The preference dividend is paid out in priority to the ordinary dividend (provided there is sufficient profit). So 2 is correct.
Although companies tend to be higher dividends if there are higher profits, that is not always the case and certainly does not have to be the case. The level of the dividend is not therefore directly related to the level of profit.
sir mean that preference dividend is not a related profit ?
i abit dun understand wat is ur means … sry ….. can u explain more pls .
thx sir
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