Which of the Following Is True About Preferred Stock

question 15

Multiple Choice

Which of the following is true about Preferred Stock?

• A) Preferred shareholders always have voting rights.
• B) In most cases, if a company fails to pay a preferred dividend when it is due the preferred shareholders have no right to collect that dividend in the future.
• C) Preferred dividends must be paid before the company can pay a dividend on its common stock.
• D) Like bonds, preferred stock always has a maturity date at which time the issue price must be repaid to shareholders.

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Definitions:

Voting Scheme

A system or method used to facilitate and process votes, typically within the context of elections, decision-making processes, or preference assessments.

Logrolling

The practice of exchanging favors, especially in politics, by reciprocal voting for each other's proposed legislation.

Private Sector

The part of the economy owned and operated by individuals and corporations for profit, as opposed to being controlled by the government.

Public Sector

The part of the economy composed of both public services and public enterprises, funded and operated by the government.