Which of the Following Statements Is CORRECT

question 59

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Cost Of Goods

The direct expenses associated with producing goods, including materials and labor costs, but excluding indirect expenses like distribution and sales force costs.

Operating Expenses

Costs associated with the day-to-day operations of a business, including rent, utilities, and payroll.

Sales

the exchange of goods or services for money, representing a key activity for businesses to generate revenue.

Basket Of Goods

This term refers to a fixed set of consumer products and services valued on a regular basis for the purpose of tracking inflation in an economy.