Which One of the Following Is a Common Feature of Preferred

question 64

Multiple Choice

Which one of the following is a common feature of preferred stock?

• A) steady stream of interest payments
• B) specified maturity date
• C) automatic bankruptcy filing when normal payments to shareholders are suspended
• D) preferential treatment over bonds and common stock in the event of a bankruptcy
• E) call provision

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Definitions:

Rate of Yield

The rate of yield is the return on an investment over a period of time, expressed as a percentage of the investment's cost.

Differential Rate

A rate that varies based on certain conditions or tiers, often used in interest rates or utility billing.

Commission Charges

Fees that are paid to an agent or service provider as compensation for facilitating transactions or services, typically calculated as a percentage of the sale price.

Proceeds

The total amount of money received from a transaction or event, such as the sale of assets or issuance of stock.