hybrid costing4

hybrid costing4 - Preferred stock i . Answer: e Diff: M...

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Preferred stock Answer: e Diff: M i . Which of the following statements is most correct? a. From the issuing corporation’s perspective, preferred stock is more risky than bonds. b. From the investor’s perspective, preferred stock is less risky than bonds. c. Issuing preferred stock allows corporations to reduce their tax burden, since preferred stock dividends are deductible. d. If a preferred issue is cumulative this means that the issuing company is permitted to pay dividends on its common stock even if it failed to pay the dividend on its preferred stock. e. Most nonconvertible preferred stock is owned by corporations. Preferred stock Answer: c Diff: E N ii . Which of the following statements concerning preferred stock is not correct? a. Preferred stock has a par (or liquidating) value. b. Most preferred issues are cumulative, meaning that the cumulative total of all unpaid preferred dividends must be paid before dividends can be paid on the common stock. c. Unpaid preferred dividends are called warrants.
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This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.

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hybrid costing4 - Preferred stock i . Answer: e Diff: M...

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