Which of the Following Statements About Preferred Stock Is FALSE

question 8

Multiple Choice

Which of the following statements about preferred stock is FALSE?

• A) Preferred stock has a higher-priority claim on the firm's assets than the common stock.
• B) Failure to pay dividends on preferred stocks will result in a default.
• C) Preferred stock has a lower-priority claim on the firm's assets than the firm's creditors in the event of default.
• D) Preferred stock typically pays a fixed dividend.

---

Definitions:

Equation

A mathematical proposition that claims equality between two expressions, generally involving variables.

Matching

Matching is a process of pairing or associating items that are similar or correspond to each other, often used in educational settings or algorithms.

Equation

A statement that asserts the equality of two expressions, often containing one or more variables.

Graph

A visual representation of data, functions, or systems of equations on a coordinate plane.