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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Shares
Tutor, I know you have stopped to asked meaning of sentences of books. I swear I tried but could not understand. It would be so nice of you if you explain me these two characteristics
1. Preference shares has rights depend on articles.
2. Ordinary shares are entitled to surplus on repayment of capital.
Source: BPP Passcards.
1 is law and really is not relevant at all for Paper FA. The rights of preference shareholders (such as the rate of interest) are set out in the documents of the company (which are called the articles).
2. If a company closes down, the ordinary shareholders get whatever is left after paying everyone else who is owed money (including the preference shareholders).
Thank you tutor.
You are welcome.