The ordinary shareholders enjoy the following rights EXCEPT the right to
The ordinary shareholders enjoy the following rights EXCEPT the right to
- A) vote at annual general meetings
- B) elect the board of directors
- C) participate in additional issues of shares
- D) receive dividends at a predetermined rate
Correct Answer: D) receive dividends at a predetermined rate
Explanation
This question is asking about the rights of ordinary shareholders, specifically which right they do not have. Ordinary shareholders are individuals who own shares in a company and have certain rights and privileges as a result.Option A states that ordinary shareholders have the right to vote at annual general meetings. This means that they can participate in the decision-making process of the company by voting on matters such as the election of directors, approval of financial statements, and other important issues.
Option B states that ordinary shareholders have the right to elect the board of directors. This means that they have a say in selecting the individuals who will oversee the management of the company and make important decisions on their behalf.
Option C states that ordinary shareholders have the right to participate in additional issues of shares. This means that they have the opportunity to purchase more shares in the company if the company decides to issue more stock. This allows them to further invest in the company and potentially increase their ownership stake.
Option D, which is the correct answer, states that ordinary shareholders do not have the right to receive dividends at a predetermined rate. Dividends are the portion of a company's profits that are distributed to its shareholders. While ordinary shareholders are entitled to receive dividends, the rate at which they are paid is not predetermined. Instead, it is determined by the company's board of directors and is usually based on the company's financial performance and available funds.
In summary, ordinary shareholders have the right to vote at annual general meetings, elect the board of directors, and participate in additional issues of shares. However, they do not have the right to receive dividends at a predetermined rate.