Preference Shares Are Often Considered to Be Closer to Debt

question 28

Multiple Choice

Preference shares are often considered to be closer to debt as they:

• A) may be issued with the condition that they are redeemable by the company in the future.
• B) may guarantee a regular or cumulative payment, similar to interest.
• C) may be able to be converted into ordinary shares at a specific date in the future, indicating they are a liability until that time.
• D) may guarantee a regular or cumulative payment, similar to interest and may be able to be converted into ordinary shares at a specific date in the future, indicating they are a liability until that time.