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Dividend on preference capital will be paid _________.
- Aonly when there are profits
- Beven if there are no profits
- Conly when directors recommend
- Donly when share holders recommend
Correct answer: C
Discussion 1
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CCommunity
only when directors recommend
Dividend on preference capital will be paid only when directors recommend. The shareholders may approve the directors’ recommendation by passing a written resolution or at a general meeting. They may decide that a lower dividend should be paid, but they cannot declare a dividend that is higher than the amount recommended by the directors.
Dividend on preference capital will be paid only when directors recommend. The shareholders may approve the directors’ recommendation by passing a written resolution or at a general meeting. They may decide that a lower dividend should be paid, but they cannot declare a dividend that is higher than the amount recommended by the directors.