Which of the Following Statements Is NOT True About Preferred

question 24

Multiple Choice

Which of the following statements is NOT true about preferred stock?

• A) Preferred dividend payments are paid by the issuer with after-tax dollars.
• B) Preferred dividends are tax deductible just like the interest payments on bonds.
• C) Preferred stock holders have limited voting privileges relative to common-stock owners.
• D) Preferred stocks are generally viewed as perpetuities because they have no fixed maturity.

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Definitions:

Correlation Coefficient

A statistical indicator that measures the intensity of the link between the relative fluctuations of two variables.

Coefficient of Correlation

A quantitative index showing the magnitude and direction of a linear correlation between two variables.

Y-intercept

The point where a line or curve intersects the y-axis of a graph, corresponding to the value of the dependent variable when all independent variables are zero.

Least Squares Line

A line of best fit determined by minimizing the sum of squares of the differences between observed values and the values predicted by the line.