CSI CSC1 Exam With Confidence Using Practice Dumps

Preferred shares provide investors withpriority to receive fixed dividends ahead of common shareholders. This fixed income feature makes preferred shares similar to debt instruments but with characteristics of equity. While preferred shareholders have no guaranteed dividend payment (subject to the company’s discretion and profitability), they are entitled to receive dividends before any distribution to common shareholders.

Preferred shares do not have a higher potential for capital appreciation compared to common shares, as they are typically designed for income rather than growth. Additionally, preferred shareholders have a lower claim on assets compared to debt holders.

TheCanada Deposit Insurance Corporation (CDIC)insures eligible deposits (e.g., term deposits) up to a maximum of$100,000 per depositor per member institution. In this case:

Keith has $150,000 in ABC Trust Company → $100,000 is insured.

Keith has $75,000 in XYZ Trust Company → Entire $75,000 is insured.

Total insured amount = $100,000 (ABC) + $75,000 (XYZ) = $200,000.

References:Volume 1, Chapter 3 ("Investor Protection Funds and Insurance")​.

Listing on a public exchange provides companies with access to a broader pool of potential investors. This increased visibility enhances the ability to raise capital through the issuance of shares or bonds. Although there are additional costs associated with being publicly listed (such as listing fees and compliance costs), the benefits of access to new sources of funding and improved liquidity for shares often outweigh these concerns.

A. Management will benefit from the public disclosure of changes in the company: Public disclosure does not directly benefit management but is a requirement for transparency.

C. Listing the company will require restrictions on stock options issued for internal use: While stock option plans may be regulated, this is not a primary consideration for listing.

D. The valuation of securities for estate tax purposes and estate tax planning will be easier: While public listing improves transparency, estate tax considerations are not a primary driver of listing decisions.