When Comparing Preferred Stock to Common Stock and Bonds,which of the Following

question 83

Multiple Choice

When comparing preferred stock to common stock and bonds,which of the following is incorrectly stated?

• A)Preferred stock and bonds have a specific maturity date.
• B)Both bonds and preferred stock pay a specific return to the investor.
• C)Both preferred stock and common stock can pay dividends.
• D)Both preferred stock dividends and common stock dividends become liabilities only when the board of directors declares them.
• E)Common stock,and typically preferred stock,have indefinite lives.

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Definitions:

Skeptical

Having an attitude of doubt or a disposition to incredulity either in general or toward a particular object.

Autonomic Nervous System

The part of the nervous system responsible for control of the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Functions

Refers to the specific roles or activities that an entity (such as a system, organ, or component) is designed or naturally evolved to perform.

Activation

The process of making something active or operative, especially in the context of biological and psychological mechanisms.