Unless otherwise stated, a Preference Share is always presumed to be

April 15, 2024 by rawan239

shares are usually cumulative, which means that if a dividend is not paid in one year, it must be paid in full before any dividends are paid to ordinary shareholders in the following year. Preference shares are also usually non-participating, which means that they do not share in the profits of the company after the preference dividend has been paid. Finally, preference shares are usually non-convertible, which means that they cannot be converted into ordinary shares.

Option A is incorrect because preference shares are not always cumulative. Option B is incorrect because preference shares are not always non-participating. Option D is incorrect because preference shares are not always non-convertible.