Compared with Ordinary Shares,preference Shares Usually

question 80

Multiple Choice

Compared with ordinary shares,preference shares usually:

• A) rank ahead of a company's creditors in the case of a wind-up.
• B) have dividends set at issue.
• C) are viewed as debt financing.
• D) pay their dividends after ordinary shares.

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Definitions:

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Contra Account

An account used in accounting to reduce the value of a related account when the two are netted together, providing a clearer picture of financial status.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in active markets.

Noncash Asset

An asset that is not cash or does not directly translate into cash in a short period, such as property, plant, and equipment.