
Understanding Preference Shares
Quiz
•
Other
•
12th Grade
•
Practice Problem
•
Hard
Tshering Dema
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20 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are preference shares?
Preference shares do not provide any dividends or liquidation priority.
Preference shares are only available to institutional investors.
Preference shares are a type of debt security with variable interest rates.
Preference shares are a type of equity security that provides fixed dividends and priority over common shares in liquidation.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How do preference shares differ from ordinary shares?
Ordinary shares guarantee fixed dividends and priority in liquidation.
Preference shares provide voting rights and variable dividends.
Preference shares have no dividends and no liquidation priority.
Preference shares differ from ordinary shares in that they have fixed dividends and priority in liquidation, while ordinary shares provide voting rights and variable dividends.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the main advantages of investing in preference shares?
High risk of loss
No voting rights
Guaranteed capital appreciation
The main advantages of investing in preference shares include fixed dividends, priority in liquidation, and potential for conversion to common shares.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the disadvantages of preference shares?
Higher priority in liquidation
Disadvantages of preference shares include limited voting rights, fixed dividends, potential lack of liquidity, and lower priority in liquidation.
Unlimited voting rights
High potential for capital gains
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Can preference shares be converted into ordinary shares?
Yes, preference shares can be converted into ordinary shares if the terms allow for it.
Preference shares are always redeemed for cash only.
Ordinary shares can be converted into preference shares.
Preference shares cannot be converted under any circumstances.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a cumulative preference share?
A cumulative preference share is a type of common stock.
A cumulative preference share is a preferred stock that accumulates unpaid dividends.
A cumulative preference share does not pay dividends.
A cumulative preference share is a bond that pays fixed interest.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a non-cumulative preference share?
A non-cumulative preference share is a bond that pays interest only when the company is profitable.
A non-cumulative preference share is a type of common stock that accumulates dividends.
A non-cumulative preference share is a type of preferred stock that does not accumulate unpaid dividends.
A non-cumulative preference share guarantees fixed dividends regardless of company profits.
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