Which One of These Statements Related to Preferred Stock Is

question 81

Multiple Choice

Which one of these statements related to preferred stock is correct?

• A) Preferred shareholders normally receive one vote per share of stock owned.
• B) Preferred shareholders determine the outcome of any election that involves a proxy fight.
• C) Preferred shareholders are considered to be the residual owners of a corporation.
• D) Preferred stock normally has a stated liquidating value of $1,000 per share.
• E) Cumulative preferred shares are more valuable than comparable noncumulative shares.

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Definitions:

Economic Profit

The difference between total revenues earned from production and the total opportunity costs of all inputs used in production.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment to changes in market conditions.

Losses

Losses refer to the amount by which expenses exceed revenues in a particular period, indicating a negative financial performance for a business.

Constant-cost Industry

An industry in which the costs of production, including the prices of raw materials and wages, do not change as the industry's output changes.