Converting preference shares offer a guaranteed price prior to a specified conversion date:
A)so that the holder is effectively protected against a fall in the price of the ordinary shares prior to conversion.
B)so that the holder has the opportunity to profit from a fall in the price of the ordinary shares prior to conversion.
C)so that the holder has the opportunity to profit from an increase in the price of the ordinary shares prior to conversion.
D)so that the holder has the opportunity to profit from an increase in the price of the ordinary shares after the conversion.

Question

Quizplus · Accepted Answer

Converting preference shares offer a guaranteed price prior to a specified conversion date to protect the holder against a fall in the price of the ordinary shares prior to conversion, ensuring that they receive a set amount regardless of any price fluctuations before the conversion date.

Converting Preference Shares Offer a Guaranteed Price Prior to a Specified