Which of the Following Is an Advantage of Preference Shares

question 35

Multiple Choice

Which of the following is an advantage of preference shares?

• A)In the event of liquidation,preference shareholders may sell their shares for higher amounts than ordinary shares.
• B)In the event of liquidation,preference shareholders may retain their proportionate share of voting rights.
• C)In the event of liquidation,preference shareholders are guaranteed to get their investment back in full.
• D)In the event of liquidation,preference shareholders have first claim on remaining company assets.

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Definitions:

Bidding Firm

A company that proposes a financial offer in an attempt to acquire another company or win a contract.

Board of Directors

A group of individuals elected by the shareholders of a corporation to oversee the management and make major decisions affecting the company's policies and strategies.

Horizontal Acquisition

A business strategy where a company acquires another in the same industry and at the same level of the supply chain.

Automaker

A company that manufactures and sells vehicles, including cars, trucks, and motorcycles.