Which Statement Regarding Preference Shares Is Not Correct

question 37

Multiple Choice

Which statement regarding preference shares is not correct?

• A) Preference shareholders have the right to receive dividends prior to any dividends being paid to ordinary shareholders.
• B) Preference shares are a permanent source of capital.
• C) Dividends paid on preference shares are normally tax deductible to the business.
• D) Preference shares typically do not carry voting rights.

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Definitions:

Demand Matches Capacity

A situation in which the demand for a product or service equals the supplier's capacity to produce or provide it, leading to optimal operational efficiency and customer satisfaction.

Service Organizations

Businesses that provide intangible products or services to customers instead of selling physical goods.

Availability

The state of being easily obtainable or accessible, often used in reference to goods, services, or information.

Marginal Costs

The cost of producing one additional unit of a product or service, often used in economic and financial analysis to determine optimal production levels.