Question : Which type of preference share does not carry the right to receive the arrears of dividends from future profits?
Option 1: Cumulative preference shares
Option 2: Non – cumulative preference shares
Option 3: Non participating preference shares
Option 4: None of theses
Correct Answer: Non – cumulative preference shares
Solution : Answer = Non – cumulative preference shares
The non-cumulative preference holders of such shares get a fixed amount of dividends out of the profits of each year. If no dividend is declared in any year due to any reason, such shareholders get nothing, nor can they claim unpaid dividends of any year in any subsequent year.
