Which of the following statements is true?
A)Common shares have a dividend rate fixed by the share contract.
B)Preferred shares have a volatile market value,therefore,they are a more risky investment than common shares.
C)Corporations are not always considered to be a separate legal entity.
D)Transfer of ownership is easy with a corporation.

Question

Quizplus · Accepted Answer

Transfer of ownership is easy with a corporation, as shares can be bought and sold on stock exchanges or through private transactions, without affecting the operations of the corporation itself. Choice A is incorrect because the dividend rate for common shares is not fixed in the share contract. Choice B is incorrect because preferred shares are considered to be less risky than common shares due to their fixed dividend rate and higher priority in receiving dividends and assets in case of liquidation. Choice C is incorrect because a corporation is always considered to be a separate legal entity from its owners.

Which of the Following Statements Is True