Preferred Stock Is the Least Used of All Long-Term Securities

question 29

Multiple Choice

Preferred stock is the least used of all long-term securities because

• A) investors can get higher returns after taxes in other investments.
• B) preferred dividends are considered regular (fixed) obligations but are not tax-deductible.
• C) flotation costs are extremely high compared to bonds.
• D) all of these.

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Definitions:

Covert Observational Methods

Research methods involving observing subjects without their knowledge, used in psychological and sociological research to gather unperturbed behavioral data.

Groupthink

A psychological phenomenon where the desire for group harmony leads to irrational or dysfunctional decision-making outcomes.

Durkheim

A founding figure in sociology who explored the social causes of behavior and the foundations of social order, particularly known for his study on suicide.

Sociologist

A social scientist who studies the development, structure, and functioning of human society and social behavior.