Which of the Following Is a Difference Between Ordinary and Preference

question 65

Multiple Choice

Which of the following is a difference between ordinary and preference shares?

• A)Preference shareholders receive priority of payment above ordinary shareholders on the winding up of the company.
• B)Preference shares offer investors a lower level of risk than ordinary shares.
• C)Preference dividends are paid before ordinary dividends.
• D)All are differences.

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Definitions:

360-Day Year

An accounting convention that simplifies interest calculation by assuming all months have 30 days.

Maturity Date

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and payable.

Leap Years

Years that include an extra day (February 29) to keep the calendar year synchronized with the astronomical year.

Leap Years

Years with an extra day (February 29) added to keep the calendar year synchronized with the astronomical year or seasonal year.