Daily Point 2290 - Cumulative Preference Shares

 

The Banking Tutor 

Daily Point 2290 

Cumulative Preference Shares 

Cumulative Preference Shares include all of the benefits such as the right to greater dividend distributions, preference in dividend payment, and preference in payment over equity shares upon the company's liquidation. 

In this type of preference share, dividends were paid also for those years in which no profit is earned. Whenever, the company declares profits, the cumulative preference shares are paid dividend for all the previous years in which dividend could not be declared. 

Sekhar Pariti

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