The 'participating' in participating preference shares means that the shareholders may:
A) vote at annual meetings.
B) vote at annual meetings if preference dividends have not been paid.
C) participate in a conversion of preference shares into ordinary shares.
D) receive a share of any further profits that are to be distributed to ordinary shareholders after the payment of the preference dividend.

Question

Quizplus · Accepted Answer

The term 'participating' in participating preference shares refers to the shareholders' right to receive additional dividends beyond the fixed preference dividend if the company achieves certain profit levels. This means they can participate in the distribution of further profits after the fixed dividends are paid to preference and ordinary shareholders.

The 'Participating' in Participating Preference Shares Means That the Shareholders