Question

What do you mean by participating preference shares?

Hint:

Participating preference shares offer both stability (fixed dividends) and an opportunity to benefit from additional profits, making them attractive to certain investors.

Answer 1

Participating preference shares are a type of preference shares that provide shareholders with the right to participate in the surplus profits of the company, in addition to receiving a fixed dividend. These shareholders may also have a claim on surplus assets during liquidation after other liabilities are settled.