Select the statement that is TRUE. A. A preference shareholder will be paid the same rate of dividend each year B. Holding preference shares in a business is more risky than holding ordinary shares C. Preference shareholders can vote at annual general meetings (AGM). D. Preference shares are worth more than ordinary shares

Select the statement that is TRUE. A. A preference shareholder will be paid the same rate of dividend each year B. Holding preference shares in a business is more risky than holding ordinary shares C. Preference shareholders can vote at annual general meetings (AGM). D. Preference shares are worth more than ordinary shares

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 2MCQ: Which of the following statements is true? The outstanding number of shares is the maximum number of...

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D. Preference shares are worth more than ordinary shares

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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