The following statements apply to equity/preference shareholders.

Which of the following statement applies only to preference shareholders?

Dividends are usually given at a set amount in every financial year.

The correct answer is option 4- Dividends are usually given at a set amount in every financial year.

Dividends are usually given at a set amount in every financial year to preference shareholders whereas there is no fixed rate of dividend for the equity shareholders. Preference shareholders dividend got accumulated if in any year no profit is available with the company. Equity shareholders got what is left with the company. If company occurs any loss then there is no dividend for the equity shareholders.

According to Section 43 of The Companies Act, 2013, a preference share is one, which fulfills the following conditions :
(a) That it carries a preferential right to dividend to be paid either as a fixed amount payable to preference shareholders or an amount calculated by a fixed rate of the nominal value of each share before any dividend is paid to the equity shareholders.
(b) That with respect to capital it carries or will carry, on the winding up of the company, the preferential right to the repayment of capital before anything is paid to equity shareholders.