Which of the Following Is a Disadvantage of Issuing Preferred

question 68

Multiple Choice

Which of the following is a disadvantage of issuing preferred stock from the common stockholders' perspective?

• A) There is a seniority of preferred stockholder's claim over common stockholders.
• B) The preferred stockholders have superior voting rights in the selection of board of directors.
• C) The preferred stockholders are always paid a higher proportion of dividend payments.
• D) Issuance of preferred stocks will result in a higher risk, to the disadvantage of common stockholders.

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Definitions:

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