If a Business Has Both Ordinary Shares and Preference Shares,which

question 10

Multiple Choice

If a business has both Ordinary Shares and Preference Shares,which of the following statements are correct?
(i) Ordinary Shareholders have the right to vote at the AGM,but Preference Shareholders do not
(ii) Ordinary Shareholders will always get higher dividends
(iii) Preference Shareholders receive the same dividend year on year
(iv) Ordinary Shareholders are paid first upon liquidation of the company

• A) All of them are true
• B) (i), (ii) and (iii) are true
• C) (i) and (iii) are true
• D) (ii) and (iv) are true

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Definitions:

Consideration

In contract law, the benefit or value that is exchanged between parties in a contract, making it binding and legally enforceable.

Deed of Trust

A document that conveys title to real property to a trustee as security for a loan until the grantor (borrower) pays the lender according to the terms of a loan.

Mortgage

A loan secured by the collateral of real estate property, where the borrower is obliged to pay back with a predetermined set of payments.

Trustee

A person or firm that holds and administers property or assets for the benefit of a third party.