Question

Preference shares are called securities, as these shares have the features of equity shares and debentures.

• A. convertible
• B. irredeemable
• C. hybrid
• D. participating

Answer 1

The correct option is C hybrid

Preference shares are called hybrid securities, as these shares have the features of equity shares and debentures. Like equity shares, preference shares receive dividend only when the company is earning a profit; like debentures, preference shares get a fixed rate of return.