With respect to preferred shares, select the statement that is correct.
A) They must have a par value.
B) They are never issued without voting privileges.
C) They cannot exist unless there also are common shares.
D) They always provide for a ﬁxed payment to be made to the shareholders even for years when no dividends have been declared.

Question

Quizplus · Accepted Answer

Preferred shares do not necessarily have to have a par value (A is incorrect), can be issued without voting privileges (B is incorrect), and do not guarantee fixed payments in years when no dividends are declared (D is incorrect). However, preferred shares cannot exist unless there are also common shares issued by the company, making option C correct.

With Respect to Preferred Shares, Select the Statement That Is