How Is Preferred Stock Affected by a Decrease in the Required

question 74

Multiple Choice

How is preferred stock affected by a decrease in the required rate of return?

• A) The value of a share of preferred stock increases.
• B) The dividend increases.
• C) The dividend decreases.
• D) The dividend yield increases.

---

Definitions:

Underweight

A condition where an individual's body weight is considered too low to be healthy, typically defined by a Body Mass Index (BMI) under 18.5.

Atypical Anorexia Nervosa

Disorder characterized by all the criteria for anorexia nervosa except that despite significant weight loss, the weight of the affected individual remains within or above the normal range.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a classification and diagnostic tool published by the American Psychiatric Association used in psychiatry and psychology.

Normal Weight

A weight classification based on body mass index (BMI) that is considered healthy and not underweight or overweight.