Preferred Stock

question 14

Multiple Choice

Preferred stock:

• A) Represents ownership interest in the issuer
• B) Is required by law to pay a fixed dividend
• C) Generally has a predetermined maturity date
• D) Dividends can be omitted at the discretion of the company president
• E) Always have cumulative dividends.

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Definitions:

FSA

A Flexible Spending Account, which is a special account used for setting aside pre-tax dollars for eligible healthcare and dependent care expenses.

Retirement Plan

A financial arrangement designed to replace employment income upon retirement, including plans like 401(k)s and IRAs.

1099 Form

A tax form in the United States that reports various types of income other than wages, salaries, and tips.

Effective Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing total tax paid by the taxable income.