Which of the Following Is True of Preferred Stock

question 75

Multiple Choice

Which of the following is true of preferred stock?

• A) It has features of bonds and a common stock.
• B) It has a claim on assets prior to creditors in the event of liquidation.
• C) Its dividends can be paid only after paying dividends to the common stockholders.
• D) It usually has a maturity of thirty years.

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Definitions:

Shares Voting

The process by which shareholders vote on company decisions and board member elections based on the number of shares they hold.

Directors

Individuals elected by shareholders to manage a corporation's affairs and make significant business decisions.

Typical Dissolution

The common process of legally dissolving a business or partnership, involving settling debts and distributing remaining assets.

Board of Directors

A group of individuals elected to represent shareholders and oversee the management and major decisions of a corporation.