Q.Distinguish between equity shares and preference shares on the basis of dividend, voting right and repayment of capital.
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Start your 14-day free trial to unlock the full solution →On dividend: An equity shareholder receives dividend only if the company's board declares one, out of that year's profit, at no fixed or guaranteed rate — and only after preference dividend has been paid. A preference shareholder receives dividend at a fixed, pre-decided rate, paid BEFORE any dividend reaches equity shareholders.
On voting right: An equity shareholder ordinarily has full voting rights on all company matters, in proportion to their shareholding. A preference shareholder ordinarily has no voting right on general company matters (barring specific circumstances laid down by law, such as when preference dividend remains unpaid for a stated period). …
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