The'conflict of Preferences' Occurs Because

question 41

Multiple Choice

The'conflict of preferences' occurs because:

• A) Preference shares do not carry a sufficiently high dividend, given their risk.
• B) Primary investors want a completely risk- free investment with high returns and borrowing firms offer only high risk/low returns as their securities.
• C) Primary investors want low- cost liquidity and certainty, and the ultimate borrowers want long- term risk- bearing capital.
• D) Customers of firms have different needs to those assumed by suppliers.

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Definitions:

Purchase Decision

The process of evaluating and deciding which product or service to buy based on various factors.

Product Shift

Changes in a company's product lineup, often involving the introduction of new products or the discontinuation of existing ones, to adapt to changing market demands or strategic focuses.

Customers' Needs

Refers to the requirements and desires of consumers that a company aims to fulfill with its products or services.

Buying Center

A group of individuals within an organization who are responsible for making purchase decisions, often involving members from different departments to ensure diverse perspectives.