All of the Following Are Given as Possible Motivations for a Corporation

question 75

Multiple Choice

All of the following are given as possible motivations for a corporation to issue preferred shares except

• A)Raise capital without sacrificing voting control.
• B)Increase the return of common shareholders.
• C)Appeal to investors who do not want to invest in common shares.
• D)If the preferred shares are convertible,they are more attractive to potential investors.
• E)Preferred dividends are paid before common dividends.

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Definitions:

Preceding Claim

A claim or legal demand made or recognized before another in time.

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the original issuer in case of default.

Endorse

To give support or public approval to someone or something, often used in the context of endorsing products, services, or candidates.

Negotiable Instruments

Written documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee's name written on the document.