Which Statement Is TRUE Regarding Preferred Stock

question 148

Multiple Choice

Which statement is TRUE regarding preferred stock?

• A)The dividends paid on preferred stock are deductible on the corporation's tax return.
• B)The company has an obligation to repay the preferred stock.
• C)The obligation to pay dividends occurs only after the board of directors declares the dividends.
• D)All of the above are true.

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Definitions:

Letter Of Credit

A binding document that a buyer can request from a bank to guarantee that the payment for goods will be made to the seller.

Invoice

A document issued by a seller to a buyer, listing goods or services provided, their prices, and payment terms.

Revocation

The act of officially withdrawing, cancelling, or annulling something, such as a license, will, or law.

Offeree

The person or entity to whom an offer is made in contract law.