The capital of Fever Grass Ltd. consists of fully paid up ordinary and preference shares. The governing regulations of Fever Grass Ltd. are as follows: "17(a) Preference shareholders shall receive a cumulative preference dividend of 5% half yearly; and (b) Two votes shall be attached to each preference share issued." Due to an outbreak of the Pink Mealy bug disease, the production of bush tea has dramatically declined. The board of directors of Fever Grass Ltd. proposes to alter clause 17(a) of the governing regulations to reduce the preference dividend from 5% to 2 % and to move a resolution to increase the voting rights of ordinary shareholders.

Advise the preference shareholders.

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Advice to Preference Shareholders of Fever Grass Ltd The proposed changes to Fever Grass Ltds govern... View the full answer