Which of the Following Statements Is Incorrect

question 54

Multiple Choice

Which of the following statements is incorrect?

• A) Preference shares usually have a fixed dividend and rate higher than ordinary shares in a situation where a company goes into liquidation.
• B) A redeemable preference share with a fixed redemption date is classified as equity.
• C) A non-redeemable cumulative preference share gives the right to be paid current or accumulated dividends before ordinary shareholders.
• D) A non-redeemable cumulative preference is normally classified as equity.

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Definitions:

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Resources

Assets or inputs available for use in the production of goods or services, including natural, human, and capital resources.

Scarce

Describes a condition where resources, goods, or capabilities are limited in availability relative to the demand for them.

Wants

Desires for goods, services, or experiences that are not essential for survival but are deemed desirable based on individual preferences.