Which of the following is an advantage of preference shares?
A)In the event of liquidation, preference shareholders have first claim on remaining company assets.
B)In the event of liquidation, preference shareholders may retain their proportionate share of voting rights.
C)In the event of liquidation, preference shareholders may sell their shares for higher amounts than ordinary shares.
D)In the event of liquidation, preference shareholders are guaranteed to get their investment back in full.

Question

Quizplus · Accepted Answer

Preference shareholders have a higher claim on assets than ordinary shareholders in the event of liquidation, but they do not have first claim, as that belongs to creditors.

Which of the Following Is an Advantage of Preference Shares