Which of the Following Regarding Preferred Stock Is True

question 86

Multiple Choice

Which of the following regarding preferred stock is true?

• A) If the price decreases, the required rate of return has decreased.
• B) If the required rate of return increases, the price decreases.
• C) If the required rate of return increases, the price increases.
• D) The price in the market remains at par.

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Definitions:

Multinational Firm

A business entity that operates in multiple countries beyond its home country, engaging in international trade or investment.

Accounting Policies

The specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

Purchasing Power Parity

A theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Exchange Rate

The price of one country's currency in terms of another currency, determining how much foreign currency can be exchanged for a unit of domestic currency.