Which of the Following Statements Is False

question 14

Multiple Choice

Which of the following statements is false?

• A) The preferred stock issued by young companies typically does not pay regular cash dividends.
• B) The preferred stock issued by young companies usually gives the owner an option to convert it into common stock on some future date, so it is often called callable preferred stock.
• C) If the company runs into financial difficulties, the preferred stockholders have a senior claim on the assets of the firm relative to any common stockholders.
• D) Preferred stock issued by mature companies such as banks usually has a preferential dividend and seniority in any liquidation and sometimes special voting rights.

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Definitions:

Insider Trade

The buying or selling of a company's securities by someone with access to confidential or non-public information about the company.

Dramatic Departure

A term that signifies a significant shift or change from the usual, expected, or traditional course, often implying dramatic or consequential actions.

Insiders

Individuals within an organization who have access to confidential and proprietary information not available to the public, such as executives and key employees.