Which of the Following Statements Is Most CORRECT

question 18

Multiple Choice

Which of the following statements is most CORRECT?

• A) By law in most states, all preferred stock must be cumulative, meaning that the compounded total of all unpaid preferred dividends must be paid before any dividends can be paid on the firm's common stock.
• B) From the issuer's point of view, preferred stock is less risky than bonds.
• C) Whereas common stock has an indefinite life, preferred stocks always have a specific maturity date, generally 25 years or less.
• D) Unlike bonds, preferred stock cannot have a convertible feature.
• E) Preferred stock generally has a higher component cost of capital to the firm than does common stock.

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Definitions:

Ophthalmoscope

A medical instrument used to examine the interior of the eye, especially the retina.

Fovea

A small depression in the retina of the eye where visual acuity is highest.

Choroid

The vascular layer of the eye lying between the retina and the sclera, providing oxygen and nourishment to the outer layers of the retina.

Melanin

A pigment that gives color to skin, hair, and eyes, and protects against UV radiation.