Question : Questions : Equity Shares and Preference Shares
Statement 1: Equity shareholders have ownership rights and voting power in company decisions.
Statement 2: Equity shareholders do not receive any dividends.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer: Both statements 1 and 2 are true.
Solution : The correct answer is (c) Both statements 1 and 2 are true.
Statement 1 is true. Equity shareholders have ownership rights in the company. They hold shares that represent ownership stakes in the company and have voting power, allowing them to participate in company decisions and influence important matters through voting on various issues.
Statement 2 is true. Equity shareholders may or may not receive dividends, depending on the company's dividend policy and financial performance. Dividends are a distribution of a portion of a company's earnings to its shareholders, but they are not guaranteed and are subject to the company's profitability, cash flow, and decisions of the board of directors.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile