Which of the following is an advantage of preference shares?
A)Preference shareholders may sell their shares for a price higher than that of ordinary shares.
B)Preference shareholders have higher voting rights than ordinary shareholders.
C)Preference shareholders have the first claim on dividend funds.
D)Preference shareholders are guaranteed that they will not take a loss on their investment.

Question

Quizplus · Accepted Answer

Preference shareholders have the first claim on dividend funds, meaning they are entitled to receive their dividends before ordinary shareholders. This can be an advantage for investors looking for a stable source of income. However, preference shareholders do not necessarily have higher voting rights than ordinary shareholders, nor are they guaranteed that they will not take a loss on their investment. The price of preference shares may be higher or lower than ordinary shares, depending on factors such as the company's financial performance and market conditions.

Which of the Following Is an Advantage of Preference Shares