Which of the following statements is CORRECT? a. Preferred dividends are not gen

Question

Which of the following statements is CORRECT?

a. Preferred dividends are not generally cumulative.

b. A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation.

c. Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in a liquidation.

d. The preferred stock of a given firm is generally less risky to investors than the same firm's common stock. e. Corporations cannot buy the preferred stocks of other corporations.

Explanation / Answer

Ans d. The preferred stock of a given firm is generally less risky to investors than the same firm's common stock.

All other options are incorrect

Reasons: Preferred dividends are generally cumulative..

.Corporations can buy the preferred stocks of other corporations.

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