When a Corporation Has Both Common Stock and Preferred Stock

question 33

Multiple Choice

When a corporation has both common stock and preferred stock outstanding:

• A)dividends on preferred stock are paid only if the company has current earnings.
• B)dividends on preferred stock must be paid before dividends on common stock can be paid.
• C)preferred stockholders receive the same dividend per share as common stockholders.
• D)dividends on preferred stock are paid only if dividends are to be paid on the common stock.

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Definitions:

Recency

The principle that the most recently presented items or experiences are likely to be remembered best.

Prototype

In person perception, an abstraction that represents the “typical” or quintessential instance of a class or group.

Implicit Personality Theory

A set of unstated assumptions about which personality traits are correlated with one another.

Stereotype

A generalized belief or assumption about the characteristics of a particular group or category of people.