Preference Shares Are Sometimes Regarded as a Debt Security Because

question 48

Multiple Choice

Preference shares are sometimes regarded as a debt security because:

• A)legally preference shares are a debt security.
• B)preference shareholders receive a residual value and not a stated value.
• C)preference dividends are paid out of before-tax income just like interest payments on bonds.
• D)preference share dividend payments,like bond interest payments are considered fixed obligations for the company.

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