Canadian Securities Course (CSC) Level 1 Practice Exam

What type of voting rights do preferred shares have?

1. Some preferred shares have limited voting rights.

2. All types of preferred shares are non-voting.

3. Common shares always hold more voting power than preferred shares.

4. Preferred shares have voting rights based on their dividend payments.

The correct answer is: All types of preferred shares are non-voting.

Preferred shares are typically non-voting shares, which means that holders of preferred shares usually do not have voting rights in the company. This distinguishes them from common shares, which generally carry voting rights. While some preferred shares may have limited voting rights (Choice A), it is not a common feature and most preferred shares do not possess any voting rights. It is important to note that common shares (Choice C) typically do hold more voting power than preferred shares, as common shareholders usually have the right to vote on matters such as the election of the board of directors and significant corporate decisions. Additionally, preferred shares do not typically have voting rights based on their dividend payments (Choice D).