Preferred Stock Is Stock ________

question 197

Multiple Choice

Preferred stock is stock ________.

• A) that sells for a high price
• B) that is distributed to employees as annual bonuses
• C) that is distributed by corporations to avoid liquidation
• D) that gives its owners certain advantages over common stockholders

---

Definitions:

Long-term Debt

Debt that is due to be paid back over a period greater than one year, used as a way for businesses to finance their operations or expand.

Debentures

A type of debt instrument that is not secured by physical assets or collateral but is backed by the general creditworthiness and reputation of the issuer.

Mortgage Bonds

These are fixed-income securities secured by a specified pool of mortgages, providing an income stream derived from mortgage interest payments.

Unsecured

Refers to loans or bonds that are not protected by collateral, making them riskier investments.