Preferred Stock Is Sometimes Treated Like a Debt Security Because

question 71

Multiple Choice

Preferred stock is sometimes treated like a debt security because:

• A) legally preferred stock is a debt security.
• B) preferred dividend payments are similar to bond interest payments and are fixed in nature regardless of the firm's earnings.
• C) preferred dividends are deductible from taxable income just like interest payments on bonds.
• D) preferred stock holders receive a residual value and not a stated value.

---

Definitions:

Knowledge

The information, understanding, and skills that one acquires through experience, education, or learning.

Triarchic Theory of Intelligence

The Triarchic Theory of Intelligence, proposed by Robert Sternberg, posits that human intelligence comprises three aspects: analytical, creative, and practical intelligence, to understand and adapt to the environment effectively.

Mental Abilities

Refers to the variety of cognitive functions and processes that include reasoning, memory, problem-solving, and abstract thinking.

Correlation Between IQ

A statistical measure that indicates the extent to which Intelligence Quotient (IQ) scores are related to another variable's changes.