Which of the Following Statements Concerning Preferred Stocks Is True

question 63

Multiple Choice

Which of the following statements concerning preferred stocks is true?

• A) Preferred stockholders have a prior claim on the income and assets of the firm as compared to the claims of lenders.
• B) Preferred stock dividends per share are normally increased as the earnings of the firm increase.
• C) Preferred dividends per share are usually not cut or suspended unless the firm is faced with serious financial problems.
• D) The par value of a stock is always the same as the initial selling price.

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Definitions:

Time And Materials Contract

A contract agreement where payment is based on the actual labor hours worked and materials used.

Labor-Hour Contract

A contract in which payment is made based on the number of hours worked, typically used for projects where the scope is not clearly defined.

Hourly Rate

The amount of money paid for each hour of work.

Incentive Fee Contract

A contract type that provides additional compensation to the contractor for exceeding performance targets.