Which of the Following Statements About Preferred Stock Is True

question 89

Multiple Choice

Which of the following statements about preferred stock is true?

• A)Preferred stock carries voting rights.
• B)Preferred stockholders receive dividends before bondholders receive interest.
• C)Preferred stock can be owned only by upper management.
• D)Preferred stockholders receive dividends after common stockholders.
• E)Preferred stock produces a fixed-amount dividend.

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Definitions:

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Imperfectly Competitive

A market structure characterized by many producers that have some control over the prices they charge, but where no single firm dominates the market.

Wage Rate

The amount of compensation individuals receive in exchange for their labor per unit of time, often expressed as an hourly wage.

Maximize Profits

The process or strategy of adjusting production or operations to achieve the highest possible financial return or profit.