In comparison to the ordinary shares, the owners of preference shares:
1. have better voting rights in company’s decision making
2. have better rights to participate in management of the company
3. get better returns in the stock markets
Choose the correct option from the codes given below:

Answer: [D] None of the statements 1, 2 & 3 is correct

Basis of DistinctionPreference SharesEquity Shares
Rate of DividendPaid at fixed rateMay vary , depending upon the profits
Arrears of DividendGet accumulated for cumulative preference sharesNo accumulation
Preferential RightsBefore Equity sharesAfter
Winding upHave a right to return of capital before equity shares . This means they are safer.Only paid when preference share capital is paid fully
Voting RightsNo voting rightsVoting rights
Right to participate in ManagementHave NO rightHave right

This question is a part of GKToday's Integrated IAS General Studies Module