Which of the Following Is a Common Reason for Companies

question 147

Multiple Choice

Which of the following is a common reason for companies to retire preferred stock?

• A) To stop paying out dividends to preferred shareholders
• B) To make a profit on the retirement of preferred stock
• C) To reward the preferred shareholders
• D) To increase stockholders' equity

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Definitions:

Employee Payroll

The total amount due to employees for the work they’ve done, including wages, salaries, and bonuses.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debt.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date, representing a form of debt.

Times Interest Earned

A ratio assessing a firm's capability to fulfill its debt responsibilities through the comparison of its earnings before interest and taxes against its interest expenditures.