Which Statement Regarding Preferred Stocks Is True

question 52

Multiple Choice

Which statement regarding preferred stocks is true?

• A)Preferred stockholders have a priority to income but not to liquidation proceeds over bondholders in the event of bankruptcy.
• B)The preferred stock of a given firm is generally less risky to investors than the same firm's common stock.
• C)Preferred dividends are not generally cumulative.
• D)A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation.

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Definitions:

Null Hypothesis

A hypothesis that assumes no significant difference or effect, serving as a default assumption to be tested against experimental data.

Wilcoxon Signed Rank Test

A non-parametric statistical hypothesis test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess whether their population mean ranks differ.

Test Statistic

In hypothesis testing, the test statistic is a standardized value derived from sample data, used to make a decision about the null hypothesis.

SPSS Output

The results generated by the Statistical Package for the Social Sciences, including statistical tests, tables, and graphs, after data analysis.