Which of the Following Is a Difference Between Ordinary and Preference

question 24

Multiple Choice

Which of the following is a difference between ordinary and preference shares?

• A) Preference shareholders receive priority of payment above ordinary shareholders on the winding up of the company.
• B) Preference dividends are paid before ordinary dividends.
• C) Preference shares offer investors a lower level of risk than ordinary shares.
• D) All are differences.

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Definitions:

Average Revenue

Average revenue refers to the amount of money generated per unit of product sold, calculated by dividing total revenue by the number of units sold.

Marginal Cost

The additional expenditure required to produce one more unit of a product or service.

Marginal Revenue

The additional income that is generated from selling one more unit of a good or service.

Marginal Cost

The financial outlay for producing a subsequent unit of a product or service.