Which of the Following Is NOT a Characteristic of Preferred

question 24

Multiple Choice

Which of the following is NOT a characteristic of preferred stock as an investment?

• A)Preferred stockholders are entitled to receive their dividend prior to payment of dividends to common stockholders
• B)Preferred stock dividends are taxed at the capital gains rate for individual investors
• C)Preferred stock dividends may be omitted by the corporation under certain circumstances
• D)It is a hybrid security of common stock and debt

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Definitions:

Shipping Costs

Expenses associated with transporting goods from one location to another, including freight charges, packaging, and handling fees.

Value-Adding Service

Value-Adding Service refers to activities or features that enhance a product or service, increasing its value to customers beyond the basic function.

Pride

A feeling of deep satisfaction derived from one's own achievements, the achievements of those with whom one is closely associated, or from qualities or possessions that are widely admired.

Motivates

Inspires or stimulates someone to act in a way that achieves goals or fulfills desires.