Which of the Following Statements Is CORRECT

question 59

Multiple Choice

Which of the following statements is CORRECT?

• A)A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights.
• B)Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock.
• C)The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis) new issues of preferred stock.
• D)One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free.
• E)One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer.

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Definitions:

Unconditional Positive Regard

A concept in psychology that involves showing complete support and acceptance of a person no matter what they say or do, often used in therapeutic settings.

Carl Rogers

An influential American psychologist and one of the founders of the humanistic approach to psychology who emphasized the importance of the self and the therapeutic relationship.

Fully Functioning

A term often used in psychology to describe an individual who is living at their highest potential, often associated with self-actualization.

Childrearing Style

The manner in which parents raise their children, including authoritative, authoritarian, permissive, and uninvolved styles, each with different impacts on child development.