From a Corporation's Point of View, a Disadvantage of Issuing

question 155

Multiple Choice

From a corporation's point of view, a disadvantage of issuing preferred stock is ________.

• A) that it increases financial leverage
• B) that it has to give fixed payments as well as voting rights to the holders
• C) its excellent merger security
• D) that the dividends are not tax-deductible

---

Definitions:

Neoclassical Economics

An economic theory that focuses on how the perception of utility and costs, along with the distribution of resources, determine price and production in a competitive market.

Behavioral Economics

A field of study that examines how psychological, cognitive, emotional, cultural, and social factors affect economic decisions and the consequences of those decisions.

Neoclassical Economics

An approach in economics focusing on the determination of goods, outputs, and income distributions in markets through supply and demand.

Behavioral Economics

A branch of economics focused on understanding how a range of factors, including psychological, cognitive, emotional, cultural, and social elements, influence the economic decision-making processes of both individuals and institutions.