Question

Read the following statements carefully:
Statement I: Equity Shareholders enjoy voting rights in company.
Statement II: Equity Shareholders get a fixed rate of dividend.
In the light of given statements, choose the correct option from the following:

• A. Statement I is true, Statement II is false.
• B. Statement II is true, Statement I is false
• C. Both the statements are true.
• D. Both the statements are false.

Hint:

Fixed dividend belongs to preference shares, voting to equity shares.

Answer 1

The Correct Option is A

Step 1: Understand the question:
Equity shareholders are the real owners of a company. We need to judge two statements about their rights.

Step 2: Check Statement I:
Equity shareholders can attend general meetings and vote on important matters. They also vote to elect the directors.
So Statement I is TRUE.

Step 3: Check Statement II:
A fixed rate of dividend is given to preference shareholders, not equity shareholders.
The dividend on equity shares depends on the profit of the company and on the decision of the directors. It may be high in a good year and nil in a bad year.
So Statement II is FALSE.

Step 4: Choose the option:
Statement I is true and Statement II is false. This matches option (A).
Option (B) reverses the two. Option (C) calls II true, which is wrong. Option (D) calls I false, which is also wrong.

Final Answer:
Statement I is true and Statement II is false. This is option (A). \[ \boxed{\text{Option (A): Statement I is true, Statement II is false}} \]