Tne valde of the preterrea stock is p63.00 per share. The value of the preferred

Question

Tne valde of the preterrea stock is p63.00 per share. The value of the preferred stock is $7 because the dividend is fixed at $7 each year 0 The value of the preferred stock is $6.30 per share because of the 9% required return. QUESTION 2 9 poir How is preferred stock similar to common stock? Investors cannot sue a corporation for the non-payment of dividends Preferred stock dividends and common stock dividends are fixed. Both preferred and common stockholders have voting control of a firm O Preferred dividend payments usually have unlimited growth potential QUESTION 3

Explanation / Answer

Option A

Investors can not sue the company for not paying dividends

Option B,C,D are wrong.

Common stock dividend are not fixed

Common shareholder have voting control

Preferred dividends have limted growth and common stock have unlimited growth

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