Preferred Stock Is NOT Similar to Debt Because

question 149

Multiple Choice

Preferred stock is NOT similar to debt because:

• A)preferred dividends are not tax-deductible whereas interest expense is tax-deductible.
• B)preferred dividends do not have to be paid whereas interest expense must be paid.
• C)preferred stock does not have a maturity date whereas debt usually has a maturity date.
• D)all of the above.

---

Definitions:

Sample Standard Deviation

A measure of the dispersion or variability of a set of sample data points.

Alternative Hypothesis

A hypothesis used in hypothesis testing that proposes there is a significant difference between the observed data and the null hypothesis.

Standard Error

The standard deviation of the sample distribution of a statistic, used to estimate the accuracy of the sample mean as a predictor of the population mean.

Sample Proportion

The fraction or percentage of the sample that represents part of a particular category or characteristic of interest.