Preference Shares Have a Number of Features Similar to Debt

question 58

Multiple Choice

Preference shares have a number of features similar to debt that distinguish them from ordinary shares.Which of the following features may be incorporated in a preference share issue?
i.Cumulative or non-cumulative
ii.Convertible or non-convertible
iii.Redeemable or non-redeemable
iv.Issued at different rankings
v.Participating or non-participating

• A) i, ii, iii, iv
• B) i, ii, iv, v
• C) ii, iii, iv, v
• D) All of the given answers

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Definitions:

Mortgage Loan

A loan secured by the collateral of specified real estate property, where the borrower is obliged to pay back with a predetermined set of payments.

Duty To Buy

An obligation, usually legal or contractual, to purchase a specific product or service.

Constructive Condition

Conditions inferred by law to enforce fairness in the performance of contractual obligations, even if not explicitly stated in the contract.

Breach Of Contract

A failure to perform any promise that forms all or part of a contract.