Which of the Following Statements Is CORRECT

question 60

Multiple Choice

Which of the following statements is CORRECT?

• A) The preferred stock of a given firm is generally less risky to investors than the same firm's common stock.
• B) Corporations cannot buy the preferred stocks of other corporations.
• C) Preferred dividends are not generally cumulative.
• D) A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation.
• E) Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in a liquidation.

---

Definitions:

Intercollegiate Athletic Association

An organization that manages college and university level sports competitions and athlete standards in the United States.

College Sports

Athletic competitions or activities organized and engaged in by college or university students, often within athletic conferences or associations.

Football Teams

Groups of players organized to compete in football, a popular team sport globally with various formats including American football and association football (soccer).

American Cities

Urban areas within the United States characterized by significant populations, economic activities, and cultural landmarks.