Economics · Shares

Which of the following best describes preference shares?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Shares that receive dividends before equity shares and have a prior right to capital repayment during liquidation.✓
2Shares that carry fluctuating dividend rates and provide voting rights to elect directors.
3Shares that are issued exclusively to the promoters of a company free of cost.
4Shares that represent unsecured short-term debt instruments of a corporate body.

Correct answer

Shares that receive dividends before equity shares and have a prior right to capital repayment during liquidation.

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