Understanding Preferred Shares

Easy Equity Markets And Instruments Preferred Shares

Layered within the world of equity securities are preferred shares, known for their preference in dividend payment ahead of common shares. These shares typically do not carry voting rights, but they appeal to investors seeking a more stable income stream. Given the unique attributes of preferred shares, understanding their classifications is essential for investors. Which of the following statements about preferred shares is correct?

Preferred shares can only be cumulative, meaning missed dividends do not carry over to future payments.

Preferred shares generally provide shareholders with voting rights equivalent to common shares.

Preferred shares can be either cumulative or non-cumulative, affecting how dividends are paid.

Hint

Submitted2.5K

Correct1.4K

% Correct56%