Which of the Following Is NOT One of the Many

question 105

Multiple Choice

Which of the following is NOT one of the many differences between long-term debt and preferred stock?

• A)Long-term debt pays interest which is tax-deductible to the borrower.
• B)Preferred stockholders are paid before bondholders if the company bankrupts.
• C)Preferred stockholders are considered non-voting owners of the company.
• D)The firm is not legally required to pay preferred stock dividends, but must pay interest to bondholders.

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Definitions:

Agents

Individuals or entities authorized to act on behalf of another, known as the principal, in business transactions or negotiations.

Customized Equipment

Machinery or tools designed and built to meet the specific requirements of a particular user.

Independent Dealer

A dealer in securities or other goods who operates independently, not being affiliated with larger institutions or networks.

Unsatisfactory

Not meeting expectations or requirements; inadequate.