Which of the Following Statements Concerning Preference Shares Is Correct

question 17

Multiple Choice

Which of the following statements concerning preference shares is correct?

• A) Preference shares normally have voting rights attached.
• B) Preference shares cannot be listed on the stock exchange.
• C) Preference shares normally receive a fixed rate of dividend.
• D) Preference shareholders face a greater risk of loss than ordinary shareholders.

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Definitions:

Bankruptcy

A legal process where individuals or organizations declare their inability to pay off their debts.

Sole Proprietorship

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm’s losses and debts.

Personal Liability

An individual's legal responsibility to settle a debt or fulfill an obligation from their own assets, as opposed to the liabilities being limited to business assets.

Business Organization

A legal entity formed to conduct business activities, ranging from sole proprietorships to corporations, structured according to law and operational needs.