Which of the Following Statements Concerning Preferred Stocks Is True

question 63

Multiple Choice

Which of the following statements concerning preferred stocks is true?

• A) Preferred stockholders have a prior claim on the income and assets of the firm as compared to the claims of lenders.
• B) Preferred stock dividends per share are normally increased as the earnings of the firm increase.
• C) Preferred dividends per share are usually not cut or suspended unless the firm is faced with serious financial problems.
• D) The par value of a stock is always the same as the initial selling price.

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Definitions:

Perspective-Taking

The ability to see the world from another’s point of view.

Frame of Reference

A set of criteria or stated values in relation to which measurements or judgments can be made.

Self-Expansion

The desire to expand the self by including traits, qualities, and skills of another.

Partner's Identity

A concept referring to the aspects of an individual's self-concept derived from their relationship and perception by their partner.