Which of the Following Describes Preference Shares

question 8

Multiple Choice

Which of the following describes preference shares?

• A)Shares which give shareholders certain preferences and advantages over ordinary shares
• B)Shares that are purchased by the company for investment purposes
• C)Shares that sell for a very high price
• D)Shares that are sold to employees of the company as a performance incentive

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Definitions:

Limited Partners

Investors in a partnership who have limited liability to the extent of their investment in the partnership. They do not partake in the day-to-day management of the business.

Limited Liability

A legal structure that limits the personal financial risk for shareholders of a company to the amount they invested in the company.

Trade Deficits

An economic condition that occurs when a country imports more goods and services than it exports.

National Debt

The total amount of money that a country's government has borrowed, usually as a result of deficit spending.