Dividend on preference capital will be paid _________.

A. only when there are profits

B. even if there are no profits

C. only when directors recommend

D. only when share holders recommend

Answer: Option C

Solution(By Examveda Team)

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.