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Preference shares

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Preference shares

  • This topic has 1 reply, 2 voices, and was last updated 10 months ago by John Moffat.
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  • Author
    Posts
  • July 22, 2024 at 6:04 am #708748
    HamzaYusuf
    Participant
    • Topics: 45
    • Replies: 23
    • ☆☆

    Are these statements true or false. Please explain them.

    1. Redeemable means when company repays owed money back to the shareholders while irredeemable means when company cannot repay owed money back to the shareholders. Does that means that in liquidation situation redeemable shareholders will get their money back to them and company is obliged to return the money back, but irredeemable shareholders do not get their money back even in the liquidation situation?

    2. Redeemable preference shares are those shares that are repayable after the agreed period. This means that company can buy back the shares and return all the owed money back to the shareholders?

    3. Irredeemable preference shares are those share that are not repayable and there is no specific period. This means that company has no option to buy back the shares and return all the owed money back to the shareholders?

    4. Irredeemable preference shares are never repayable and so are just like ordinary shares
    (which are also never repayable) BUT preference shares pay a fixed dividend?

    5. Preference shareholders do not have voting rights but they receive fixed dividends each year in preference to ordinary shareholders while ordinary shareholders do have voting rights and they receive variable dividends if company has enough profits?

    6. Dividend is calculated by multiplying the nominal value of the shares with the dividend percentage that was proposed by the directors in the AGM?

    Really grateful to your services

    July 22, 2024 at 8:14 am #708750
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    Most of your questions relate to the law exam and not to the Paper FA exam.

    Please copy your post into the Paper LW Ask the Tutor Forum.

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