The Name Preferred Stock Is in Reference to the Fact

question 67

Multiple Choice

The name preferred stock is in reference to the fact that:

• A)it is a type of corporate debt.
• B)it is treated like debt for tax purposes.
• C)preferred dividends must be paid in full before any additional interest may be paid.
• D)preferred dividends must be paid in full before any common stock dividends can be paid.
• E)fixed income traders prefer it to bonds.

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Definitions:

Saving

The process of setting aside a portion of current income for future use, or the funds that have been set aside for such purposes.

Disposable Income

Financial holdings households can direct towards spending and saving activities after tax deductions.

Consumption

The act of using up goods and services to satisfy human needs and wants, considered a principal component of GDP.

Durable Goods

Goods that are intended to last for a long period of time, such as cars, appliances, and furniture, typically requiring more significant investment than non-durable goods.