Which of the following securities is referred to as hybrid security?

Question

BlackTom AI · Accepted Answer

Question restatement: The prompt asks which of the listed securities is referred to as a hybrid security, with four options.
Option a: 'Ordinary shares' are classic equity instruments that represent ownership and typically carry voting rights and residual claims on assets. They do not combine debt-like features such as fixed interest payments, so they are not considered hybrid securities.
Option b: 'Preference shares' are commonly described as hybrid securities because they blend debt-like and equity-like characteristics. They typically pay a fixed dividend (debt-like) and have priority over ordinary shares in liquidation (equity-like), while still representing an equity stake. This mix of features justifies calling them hybrids.
Option c: 'Commercial papers' are short-term debt instruments issued by corporations and banks to meet immediate liquidity needs. They are pure debt instruments and do not combine equity characteristics, so they are not hybrids.
Option d: 'Bonds' are straightforward debt securities with fixed interest payments and principal repayment. They lack the equity-like features that characterize hybrids, so they are not hybrid securities.
In summary, the distinguishing factor is the combination of debt-like and equity-like traits, which aligns with preference shares rather than ordinary shares, commercial papers, or bonds.

MCD2170 - T1 - 2025 Week 7 Post class homework

Which of the following securities is referred to as hybrid security?

View Explanation

Log in for full answers

Similar Questions

Which of the following securities is considered a hybrid security?

Which of the following securities is referred to as hybrid security?

Which of the following securities is referred to as hybrid security?

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler