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N. K. Gupta posted an Question
July 05, 2021 • 15:42 pm 30 points
  • UGC NET
  • Commerce

Cumulative preferential share and participating prefencial share defination

cumulative preferential share and participating prefencial share defination

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  • Priya gulani best-answer

    Cumulative Preferred Shares Preference shares that include a cumulative clause protect the investor against a downturn in company profits. If revenues are down, the issuing company may not be able to afford to pay dividends. Cumulative shares require that any unpaid dividends must be paid to preferred shareholders before any dividends can be paid to common shareholders.

  • Priya gulani

    Participatory Preferred Shares Participatory preference shares provide an additional profit guarantee to shareholders. All preference shares have a fixed dividend rate, which is their chief benefit. However, participatory shares guarantee additional dividends in the event that the issuing company meets certain financial goals. If the company has a particularly lucrative year and meets a predetermined profit target, holders of participatory shares receive dividend payments above the normal fixed rate.

  • Rucha rajesh shingvekar

    Participating preferred stock holders are entitled to receive a share of any remaining liquidation proceeds on an as-converted to common stock basis, after they have already gotten back their liquidation preference

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  • Rucha rajesh shingvekar Best Answer

    Cumulative preference shares give the shareholder a right to dividends that may have been missed in the past. Dividends are paid by companies to reward shareholders. ... They are entitled to these before the holders of common shares can receive dividends once more.

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