Canadian Securities Course (CSC) Level 1 Practice Exam 2026 – All-In-One Guide to Master Your Exam Prep!

Companies may choose to issue preferred shares instead of common shares when the common stock is falling or inactive. Preferred shares typically offer a fixed dividend payment, priority over common shareholders in the event of liquidation, and do not usually carry voting rights. By issuing preferred shares, companies can provide a more stable income stream to investors without diluting the voting rights of existing common shareholders. This can be a strategic way for companies to raise capital without impacting the control of existing shareholders, especially during periods of market volatility or when common shares are underperforming.