Which One of the Following Statements Is Not True About

question 10

Multiple Choice

Which one of the following statements is not true about preference shares?

• A)Owners of preference shares are not guaranteed dividend payments by the company.
• B)Preference shareholders have limited voting privileges relative to ordinary share owners.
• C)Preference share dividends are fixed financial obligations to the company just like bond coupon payments.
• D)Preference shares represent ownership in the company.

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Definitions:

Prepaid Insurance

An asset on the balance sheet that represents insurance paid in advance, which will be expensed over the time period it covers.

Rent Expense

The cost incurred from leasing a property or equipment for business operations, recognized as an expense over the lease period.

Share Premium

The amount received by a company over and above the face value of its shares when it issues them.

Capital in Excess

Funds that exceed the par value of issued stock, often referred to as additional paid-in capital or share premium.