Page 38 - Topic 1 - 1.3. Business Combinations

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Preference Shares

• What are preference shares?

• Preferential right to profit

• Right to dividend is limited
• Usually % of face value e.g. 20% R4 preference shares

• No voting rights unless dividend not declared - protective

rights

• Preference shares may be

• Cumulative or non‐cumulative

• Redeemable or non‐redeemable

• Equity or liability

• If company wants to declare ordinary dividends

• Must first declare preference dividends

• Ordinary shareholders

• No preferential right - residual right

• Can receive unlimited dividends

• Always have voting rights
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