Which of the Following Statements Is CORRECT

question 53

Multiple Choice

Which of the following statements is CORRECT?

• A)Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in 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.