Equity Investments Q139
- A
Preference shares have characteristics of both debt and equity securities.
- B
Preference shareholders rank below subordinated bondholders with respect to claims on the company’s net assets upon liquidation.
- C
The price of convertible preference shares tends to be more volatile than their underlying common shares.
- Option : C
- Explanation : The price of convertible preference shares tends to be less volatile than their underlying common shares because they do not allow investors to share in profits of the company and the dividends on preference shares are fixed.
