Which of the Following Statements Pertaining to Preferred Stock Is

question 95

Multiple Choice

Which of the following statements pertaining to preferred stock is not correct?

• A)Preferred stock may have an adjustable rate which pays a dividend that is adjusted,usually on a quarterly basis.
• B)Preferred stock dividends are contractual obligations that must be paid in profitable years.
• C)Most preferred stock issues are nonparticipating,meaning that the shareholders are entitled to receive only dividends based on the stated dividend rate.
• D)Preferred shareholders are given preference with respect to both dividend distributions and in liquidation of the company.

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