Which of the Following Statements Is True

question 45

Multiple Choice

Which of the following statements is true?

• A) Common stock is a more conservative investment than preferred stock.
• B) Dividends on preferred stock are less secure than dividends paid to common stockholders.
• C) Preferred stockholders have a priority claim on dividends before common stockholders.
• D) As the basic form of ownership, common stockholders receive their dividends before any other class of stock.
• E) As the basic form of ownership, common stockholders have a priority claim on a firm's assets if the firm enters bankruptcy.

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Definitions:

Production Possibilities Frontier

A graphical representation showing the maximum quantity of two goods or services that an economy can produce when all resources are used efficiently.

Opportunity Cost

Opportunity cost is the value of the next best alternative forgone as a result of making a decision.

Bananas

A curved, yellow fruit that is rich in potassium and can be eaten raw or used in cooking and baking.

Exports

Exports are goods or services produced in one country and sold to buyers in another, contributing to a nation's GDP and influencing its balance of trade.