单选题

Which of the following is most accurate concerning key characteristics of different types of preference shares?

A、 Preference shares have characteristics of both debt and equity securities.
B、 Preference shareholders rank above 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 because they do not allow investors to share in profits of the company.

【正确答案】 A

【答案解析】

A is correct. Preference shares have characteristics of both debt securities and common shares. Similar to interest payments on debt securities, the dividends on preference shares are fixed but not contractual obligations. Similar to common shares, preference shares can be perpetual and can pay dividends indefinitely.