Preferred Stock May Not Having the Same Ownership Privileges as Common

question 45

True/False

Preferred stock may not having the same ownership privileges as common stock, but preferred stock is offered a fixed dividend stream supported by a binding contractual obligation.
Preferred stock DOES have a fixed dividend stream, but does not carry a binding contractual obligation, as does debt.

---

Definitions:

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its debt obligations with its cash flow.

Net Use of Funds

This term refers to the total expenditure of funds by an organization or project, minus any internal funding sources or income generated, highlighting the net outflow.

Sources and Uses of Funds

A financial statement that details how funds were obtained and spent by a business over a specific period.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the current or upcoming fiscal year, such as buildings and machinery.