Canadian Securities Course (CSC) Level 1 Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Canadian Securities Course Level 1 Exam with our comprehensive study tool. Use flashcards and multiple choice questions to hone your skills. Fully understand each topic with hints and explanations. Get ready to excel in your exam!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What are the advantages and disadvantages of preferred shares?

  1. Low cost of dividends, restricted voting rights

  2. No dividend obligations, high cost of dividends

  3. No equity dilution, long-term repayments

  4. Flexible dividends, payment triggers default

The correct answer is: No dividend obligations, high cost of dividends

Preferred shares have the advantage of not having a dividend obligation, meaning that the company can choose whether or not to pay dividends to preferred shareholders. This flexibility allows companies to manage their cash flow better. On the other hand, preferred shares typically have a higher cost of dividends compared to common shares, which is a disadvantage as it can be a financial burden for the company.

More Questions Like This