Preferred Stock Is Similar to Bonds in That Its Dividends

question 98

True/False

Preferred stock is similar to bonds in that its dividends are of a fixed size and are paid before common stock dividends are paid.

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Definitions:

Entitlements

Programs for which funding is mandatory and guaranteed by law to those who meet eligibility criteria, such as Social Security and Medicare.

Eligible Person

An individual who meets specific criteria or requirements, making them qualified to receive certain benefits, rights, or services.

Pay-As-You-Go System

A financial policy where expenses must be funded out of current revenues without resorting to borrowing or debt.

Social Security

A government program that provides financial assistance to people with an inadequate or no income, primarily the elderly and disabled.