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

---

Definitions:

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and signed by the involved parties, to prevent fraud.

Force Majeure

A legal clause exempting parties from fulfilling contractual obligations due to unforeseeable circumstances beyond their control, such as natural disasters.

Oral Agreement

A verbal commitment between two or more parties on a set of terms, which can be legally binding in certain circumstances.

Gifts and Gratuities

Items or payments given voluntarily without payment in return, often as a gesture of goodwill or for promotional purposes.