Which One of the Following Is a True Statement

question 7

Multiple Choice

Which one of the following is a true statement?

• A) Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.
• B) Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
• C) Preferred stockholders have voting power.
• D) Investors can sue managers for nonpayment of preferred dividends.

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Definitions:

Benchmark Interest Rate

The standard interest rate set by national banks against which other lenders measure their rates.

Elasticities

A measure of how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price or income.

Total Sales

The aggregate revenue received from selling goods or services over a given period of time.

Complement

A good or service that is used together with another, where the use or consumption of one increases the value or demand of the other.