Which of the following is NOT a characteristic of preference share? Group of answer choices 1. Pays fixed dividends. 2. Do not usually have voting rights. 3. Ranks last for payment in the event of firm liquidation. 4. Dividends can be accrued.

Which of the following is NOT a characteristic of preference share? Group of answer choices 1. Pays fixed dividends. 2. Do not usually have voting rights. 3. Ranks last for payment in the event of firm liquidation. 4. Dividends can be accrued.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 1MC: Which of the following is not a characteristic that sets preferred stock apart from common stock? A....

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Question

Q19. Which of the following is NOT a characteristic of preference share?

Group of answer choices

1. Pays fixed dividends.

2. Do not usually have voting rights.

3. Ranks last for payment in the event of firm liquidation.

4. Dividends can be accrued.

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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