Understanding Preferred Shares

Very Easy Equity Markets And Instruments Preferred Shares

Preferred shares, also known as preference shares, are a type of equity security that have characteristics of both equity and debt. They typically pay fixed dividends and have priority over common shares in the event of liquidation. However, preferred shareholders usually do not have voting rights.

Which of the following statements about preferred shares is true?

Preferred shareholders have a higher claim on assets than common shareholders.

Preferred shares provide voting rights similar to common shares.

Preferred shares are guaranteed to pay dividends.

Hint

Submitted3.3K

Correct3.1K

% Correct94%