Which of the Following Statements Is CORRECT

question 75

Multiple Choice

Which of the following statements is CORRECT?

• A) Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock.
• B) The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis)new issues of preferred stock.
• C) One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free.
• D) One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer.
• E) A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights.

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Definitions:

ERP

Enterprise Resource Planning, an integrated management of main business processes, often in real-time and mediated by software and technology.

CRM

Customer Relationship Management (CRM) is a technology for managing all your company's relationships and interactions with current and potential customers, aiming to improve business relationships.

SCM

Supply Chain Management involves the systematic control over the transfer of resources, information, and finances as they make their way from their origin with suppliers to manufacturers, onto wholesalers and retailers, and finally to the end user or consumer.

TPS

The Transaction Processing System, a specific form of information system, is tasked with collecting, saving, adjusting, and fetching transactional information pertaining to an organization.