Achieving an Increased Return on Common Stock by Paying Dividends

question 96

Multiple Choice

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

• A) Premium on stock.
• B) Capital gain.
• C) Discount on stock.
• D) Preemptive right.
• E) Financial leverage.

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Definitions:

Assignment

The act of transferring rights, duties, or property from one party to another.

Internal Legal Memoranda

Documents used within a law firm or legal department to communicate analysis, research findings, and recommendations regarding legal issues or cases.

Pleadings

The formal written statements of the plaintiff and defendant in a lawsuit that detail their respective claims and defenses.

Letters

Written forms of communication, often used for correspondence between individuals or organizations.