Which of the Following Statements Is Most Correct

question 15

Multiple Choice

Which of the following statements is most correct?

• A) One of the advantages to the firm associated with financing using preferred stock rather than common stock is that control of the firm is not diluted.
• B) Preferred stock provides steadier and more reliable income to investors than common stock.
• C) One of the advantages to the firm of financing with preferred stock is that 70 percent of the dividends paid out are tax deductible.
• D) Statements a and c are correct.
• E) Statements a and b are correct.

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Definitions:

Unstable

Lacking consistency, predictability, or stability; prone to sudden change or variability.

Farm Commodities

Primary agricultural products that are harvested for human consumption, livestock feed, and use in industrial applications, such as grains, cotton, and livestock.

Competing Firms

Companies that operate in the same industry and vie for the same consumer base or market share.

Food Products

Items derived from agriculture or animal farming that are intended for consumption.