Which three of the following are advantages to the firm of preference share capital?
A) Preference shares are an alternative shock absorber to ordinary shares because of the possibility of avoiding the annual cash outflow due on dividends.
B) Preference shares are an additional source of capital but do not dilute the influence of the ordinary shareholders on the firm's direction.
C) Preference dividends can be omitted for one or more years.
D) Preference shareholders receive all the extraordinary profits when the firm is doing well.
Correct Answer:
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