Which of the Following Is Not True About Preferred Stock

question 78

Multiple Choice

Which of the following is not true about preferred stock?

• A) 100% of dividends are nontaxable to other corporations which hold preferred stock
• B) the aftertax cost is higher than debt with the same yield
• C) dividends are legal obligations of the firm
• D) preferred stocks are often cumulative in respect to dividends

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Definitions:

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The ongoing process of thinking about your interests, values, skills, and preferences; exploring the life, work, and learning options available; and ensuring that your work fits with your personal circumstances.