FAQs

Question

Are PROFITS AND LOSSES of Equity shares and Preference shares calculated separately by the companies
Do Equity shareholders need to pay for the fixed interest given to Preference shareholders even in the case, if there is a loss???

Answer

There is only one calculation of profit/loss for any company. Secondly, preference shares are not entitled to a fixed return in all circumstances. Whether they will be paid any return and when, will depend on:
a) The kind of preference shares we are talking about
b) When (whether in the same year or in the subsequent year/s) there is sufficient profit to pay for their returns



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