Which of the Following Is Not True About Preferred Stock

question 70

Multiple Choice

Which of the following is not true about preferred stock?

• A) 70% of dividends are nontaxable to other corporations which hold preferred stock.
• B) The after-tax cost is higher than debt with the same yield.
• C) Dividends are legal obligations of the firm.
• D) Preferred stocks are often cumulative in respect to dividends.

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Definitions:

WISC-IV

The Wechsler Intelligence Scale for Children, Fourth Edition, a tool used to measure a child's intellectual abilities and cognitive strength and weaknesses.

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Relational Aggression

A type of aggression that harms others through deliberate manipulation or damage to their relationships or social status.

Hostile Aggression

Aggressive behavior motivated by feelings of anger and aimed at inflicting pain or harm to others.