Which of the Following Is TRUE of Preferred Stocks

question 117

Multiple Choice

Which of the following is TRUE of preferred stocks?

• A)Preferred stock with a conversion feature allows holders to change each share into a stated number of shares of common stock.
• B)Like bonds,preferred stocks are due for payment on a fixed maturity date along with interest.
• C)Restrictive covenants of preferred stocks include provisions about listing of stocks on the securities exchange and determining the price of stock.
• D)A firm's bond indenture indicates how many authorized preferred shares and bonds it can issue.

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Definitions:

Intangible Assets

Non-physical assets such as patents, copyrights, and goodwill that have value to a business.

Utility

A measure of the satisfaction or benefit derived from consuming goods and services.

Allocation

The process of assigning a cost, or a group of costs, to one or more cost objectives, in reasonable proportion to the benefits provided or other equitable relationship.

Goodwill

An intangible asset representing the value of a company’s brand name, solid customer base, good customer relations, and employee morale.