The Floating Rate Feature on Preferred Stock Allows the Shareholders

question 77

Multiple Choice

The floating rate feature on preferred stock allows the shareholders

• A) to receive more dividends than the quoted yield when the firm enjoys a good year.
• B) to pay lower taxes when the dividend yield increases.
• C) to receive dividends that the corporation did not pay in previous years.
• D) to receive a higher or lower dividend yield depending on current competitive market conditions.