How Many of the Following Statements, Relating to Ordinary Shareholders

question 4

Multiple Choice

How many of the following statements, relating to ordinary shareholders, are true?
Ordinary shareholders generally have greater risks than preference shareholders.
Ordinary shareholders are the last to receive a distribution if the company is wound up.
Ordinary shareholders have a greater opportunity for gain if the company is profitable than preference shareholders.
Ordinary shareholders have the right to vote at meetings of the company.

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Operating Cash Flow

Measurement of the cash generated by a company's normal business operations.

Quantity Sold

The total number of units of a product or service that have been sold within a specific period.

NPV

Net Present Value; a calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time.

Break-Even Level

The point at which total costs and total revenue are equal, resulting in no net loss or gain, and the point at which a business, product, or service becomes profitable.