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Question Completion Status: Moving to the next question prevents changes to this answer. Question 2 Which type of the following securities has the pattern of cash flows of perpetuities? Common shares Preferred shares. Corporate bonds Government bonds. Mtoving to the next question erevents cnanges to this answer.
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Answer #1

Answer: Preferred shares.

Explanation:

Perpetuity is stream of constant cash flows that goes on infinitely.

The dividend on preference shares has this characteristic.

Other options:

Common shares--the dividends need not follow any pattern.

Corporate bonds--there is a maturity date by which the cash flows will end.

Government bonds--there is a maturity date by which the cash flows will end.

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