Which of the Following Is a Hybrid Form of Equity

question 43

Multiple Choice

Which of the following is a hybrid form of equity that effectively pays dividends that are tax deductible and is considered Tier 1 capital?

• A) Common stock
• B) Preferred stock
• C) Trust preferred stock
• D) Leases
• E) Trust subordinated debt

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Definitions:

Assets

Resources owned by a company that have economic value and can be converted into cash.

Liabilities

Financial obligations or debts that a company owes to external parties.

Residual Equity

The amount of equity remaining for shareholders after all liabilities have been deducted from total assets.

Owner's Equity

The assets left over in a business once liabilities are cleared, showing the equity of owners or shareholders.