Meaning And Types of Shares, Debenture And Other Securities - SS1 Economics Past Questions & Answers - page 1

1

What type of shares give shareholders priority over common shareholders in receiving dividends and in the event of the company's liquidation?

A

Common Shares

B

Preferred Shares

 

C

Both a and b

D

None of the above

CORRECT OPTION: b
2

What are debentures?

A

A type of debt instrument

B

A type of equity instrument

C

A type of hybrid instrument

 

D

A type of security that represents ownership in a company

CORRECT OPTION: a
3

Which of the following is not an example of other securities?

A

Bonds

B

Options

C

Warrants

 

D

Common Shares

CORRECT OPTION: d
4

What do bonds and debentures have in common?

A

Both represent ownership in a company

B

Both are a type of equity instrument

 

C

Both represent a promise to repay borrowed money

 

D

Both give the holder priority over other shareholders in receiving dividends

CORRECT OPTION: c
5

Which type of shares gives the shareholder voting rights?

A

Common Shares

B

Preferred Shares

 

 

C

Both a and b

D

None of the above

CORRECT OPTION: a
6

What is the main difference between common shares and preferred shares?

Common shares give the shareholder voting rights, while preferred shares give the shareholder priority over common shareholders in receiving dividends and in the event of the company's liquidation.

7

What are debentures, and how do they differ from shares?

 

Debentures are a type of debt instrument that companies use to raise capital. When a company issues debentures, they are borrowing money from investors, and they promise to repay the principal and interest at a specified time in the future. Debenture holders do not have any ownership rights in the company, unlike shareholders who own a portion of the company.

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