Preference Shares Are Considered More Risky Than Ordinary Shares

question 34

True/False

Preference shares are considered more risky than ordinary shares.

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Definitions:

Bonds Payable

Long-term liabilities representing money a company owes to bondholders.

Interest Expense

The cost incurred by an entity for borrowed funds, representing the interest payable on any borrowings - bonds, loans, convertible debt, or lines of credit.

Consolidated Net Income

The total earnings of a parent company and its subsidiaries, after taxes and interest, reported as a single figure.