Which One of the Following Characteristics of Preferred Stock Would

question 86

Multiple Choice

Which one of the following characteristics of preferred stock would make the stock a dilutive security for purposes of calculating earnings per share?

• A) The preferred stock is callable.
• B) The preferred stock is convertible.
• C) The preferred stock is cumulative.
• D) The preferred stock is noncumulative.
• E) The preferred stock is participating.

---

Definitions:

Physical Existence

The actual, tangible presence of an asset, as opposed to intangible assets or rights.

External Audit

An independent examination of financial records and statements, conducted by an outside firm, to ensure accuracy and compliance with accounting standards.

Financial Statements

Official documentation detailing the monetary transactions and financial standing of a company, person, or different organization.

Credibility

The quality of being trusted and believed in, important in financial reporting and accounting practices.