​Preferred Stock and Bonds Are Similar Because

question 6

Multiple Choice

​Preferred stock and bonds are similar because

• A) ​they both have voting power
• B) interest and dividend payments are legal obligations
• C) ​neither interest nor dividends are tax deductible
• D) ​both are a source of financial leverage

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Definitions:

Statement Of Comprehensive Income

Financial statement summarizing a firm’s performance over a period of time. Formerly called an income statement.

Quick Ratio

A liquidity metric that measures a company's ability to cover its short-term obligations with its most liquid assets, excluding inventory.

Accounts Receivable

Company receivables originating from goods or services offered to customers who haven't yet completed payment.

Accounts Payable

Funds that a company is required to pay to its suppliers for products or services received but for which payment has not yet been made.