Correct Answer: Receive a fixed dividend before equity shareholders

Solution : The correct answer is (b) Receive a fixed dividend before equity shareholders

Preference shares, also known as preferred shares or preferred stock, provide certain preferential rights to shareholders. One of the primary rights associated with preference shares is the entitlement to receive a fixed dividend before any dividends are distributed to equity shareholders.Preference shareholders have priority over equity shareholders when it comes to receiving dividends. This means that if the company generates profits and decides to distribute dividends, preference shareholders will be paid their fixed dividend amount before any dividends are allocated to equity shareholders. In the event of a company's liquidation, preference shareholders also have a higher priority in receiving their share of the company's assets compared to equity shareholders.