Which of the Following Statements Is TRUE

question 25

Multiple Choice

Which of the following statements is TRUE?

• A)Preferred stock usually has a stated or par value and,like bonds,this par value is not repaid at maturity because preferred stocks do not have a maturity date.
• B)The par value for preferred stock,unlike bonds,is never paid back.
• C)A preferred stock's cash dividend due each year is based on the stated dividend rate times the market value of the stock.
• D)Some preferred stocks are cumulative with respect to dividends,meaning that if a company skips a cash dividend,it must pay it at some point in the future.

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Definitions:

Predictability

The characteristic of a process, principle, or system that enables it to be known or declared in advance, especially through the application of scientific or logical techniques.

Probability

A measure of the likelihood that an event will occur, often quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Liberty

The state of being free within society from oppressive restrictions imposed by authority on one's way of life, behavior, or political views.

State

An organized political community living under a government; can also refer to the condition or mode of being.