A Dividend Preference for Preferred Stock Means That

question 53

Multiple Choice

A dividend preference for preferred stock means that:

• A)Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders.
• B)Preferred shareholders are guaranteed dividends.
• C)Dividends are paid quarterly.
• D)Preferred stockholders prefer dividends more than common stockholders.
• E)Dividends must be declared on preferred stock.

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Definitions:

Ecological Fallacy

A logical error in reasoning where conclusions about individual-level behaviors or attributes are derived from group-level data.

Exception Fallacy

A logical error where a conclusion is drawn about an entire group based on a few atypical examples.

Dominant Culture

The culture that holds the most power and is most widely accepted within a particular society, often shaping mainstream norms and values.

Negative Assessment

A critical or unfavorable evaluation of something.