Preferred Stock May Be Good for a Company Because It

question 77

Multiple Choice

Preferred stock may be good for a company because it:

• A) expands the capital base of the firm without diluting the common stock ownership.
• B) does not require interest payment in times of financial trouble,but are tax-deductible when dividends are paid.
• C) is not as costly as common stock or bonds.
• D) gives up no control even when dividend payments are missed.

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Definitions:

Emotional Instability

A characteristic of personality that involves unpredictability and a tendency to rapidly alter emotions and reactions.

Neuroticism

A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.

Big Five

A model describing human personality as composed of five broad traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Big Five

A theory in psychology that identifies five broad dimensions of personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.