Preference Shares Can Have Characteristics That Are Consistent with Liabilities

question 17

Multiple Choice

Preference shares can have characteristics that are consistent with liabilities.These characteristics include:

• A)Participation in dividends
• B)Priority over ordinary shares in the return of capital
• C)Voting rights
• D)The claim associated with the preference share is variable

---

Definitions:

Marginal Cost

The cost of producing one additional unit of a good or service, taking into account factors that vary with production levels.

Average Cost

The total cost of production divided by the number of units produced, indicating the cost per unit of output.

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulating the social or political environment.

Net Social Gain

The total benefit to society from producing and consuming a good or service, taking into account both the private benefits and costs and any external benefits or costs.