Though They Are Classified as Equity, Why Are Preferred Shares

question 41

Multiple Choice

Though they are classified as equity, why are preferred shares also similar to debt?

• A)Both carry the same interest rate.
• B)Dividends on preferred shares must be paid out before any common share dividends.
• C)The voting structures for preferred shares and debt are equivalent.
• D)Preferred shares have similar maturity structures to debt.

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