Which of the Following Is Not True About Preferred Stock

question 99

Multiple Choice

Which of the following is not true about preferred stock?

• A) 100% of dividends are nontaxable to other corporations which hold preferred stock.
• B) The aftertax cost is higher than debt with the same yield.
• C) Dividends are legal obligations of the firm.
• D) Preferred stocks are often cumulative in respect to dividends.

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Definitions:

Numerical Tables

Structured displays of data organized in rows and columns, often used to present statistical information.

Units

Individual components or segments that can function independently or as part of a larger structure or organization.

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The best-known type of timeline chart.

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A diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.