Preferred Stock Is Sometimes Regarded Like a Debt Security Because

question 62

Multiple Choice

Preferred stock is sometimes regarded like a debt security because

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