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Question : Which of the following shareholders have a right to receive dividends first?

Option 1: Equity Share holder

Option 2: Debenture Holder

Option 3: Preference Share Holder

Option 4: None of the Above


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: Preference Share Holder


Solution : Preference shareholders have a right to receive dividends as compared to other shareholders of the company.

However, equity shareholders are also entitled for dividends once it is announced by the company, so it is the discretion of the company to distribute dividend to the equity shareholders, hence it is not considered as a right of equity shareholders to receive dividends.

Hence, the correct answer is option 3.

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