_____________________ Preferred Stock Has a Feature That Allows Preferred Stockholders

question 161

Short Answer

_____________________ preferred stock has a feature that allows preferred stockholders to share with common stockholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

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Definitions:

Accounting Costs

The actual expenses and cash outflows that a business incurs, captured in its financial records.

Implicit Costs

The opportunity costs of using resources owned by the firm for its current purposes rather than the next best alternative uses.

Accounting Profits

Accounting profits refer to the net earnings of a company as calculated by subtracting total expenses from total revenues, using standard accounting principles.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, indicating the profitability of a company beyond basic accounting measures.