Which of the Following Statements Is Most CORRECT

question 18

Multiple Choice

Which of the following statements is most CORRECT?

• A) By law in most states, all preferred stock must be cumulative, meaning that the compounded total of all unpaid preferred dividends must be paid before any dividends can be paid on the firm's common stock.
• B) From the issuer's point of view, preferred stock is less risky than bonds.
• C) Whereas common stock has an indefinite life, preferred stocks always have a specific maturity date, generally 25 years or less.
• D) Unlike bonds, preferred stock cannot have a convertible feature.
• E) Preferred stock generally has a higher component cost of capital to the firm than does common stock.

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Definitions:

Disease

A disorder of structure or function in a human, animal, or plant, especially one that produces specific signs or symptoms or that affects a specific location.

Sex Drive

The natural human instinct or desire for sexual activity.

Heterosexual Women

Women who are sexually attracted to individuals of the opposite sex.

Attraction

A force or factor that draws individuals together, making them interested in each other, which can be physical, emotional, intellectual, or social.