hich of the following statements is CORRECT?   a.  Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in a liquidation.   b.  The preferred stock of a given firm is generally less risky to investors than the same firm's common stock.   c.  Corporations cannot buy the preferred stocks of other corporations.   d.  Preferred dividends are not generally cumulative.   e.  A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation. Provide an explanation for the choice

Q: Which of the following statements is false? The cost of debt securities is highest due to their…

A: The situation under which any entity can encounter loss, injury or damage is known as a risk. Risks…

Q: One of the major advantages of common stock financing is: I. equity capital requires a lower rate of…

A: Common stock refers to the equity shares of the company which are issued to the shareholders for…

Q: (I) A share of common stock in a firm represents an ownership interest in that firm. (II) Preferred…

A: Owners of the company:The company functions with the help of the management, However, they are not…

Q: Common shares are the most important security issued by the companies to raise the funds. Since,…

A: A fractional ownership that begins the maximum entrepreneurial commitment associated with a trading…

Q: The cost of preferred stock Preferred stock is a hybrid security, because it has some…

A: Preferred stock are paid dividend each year and dividend and market value give cost of preferred…

Q: Companies with strong earnings but limited growth opportunities     A) do not generally pay any…

A: Companies with strong earnings but limited growth are called blue chip companies. Blue chip…

Q: Which of the following statements is CORRECT? a. The preferred stock of a given firm is generally…

A: The objective of the question is to identify the correct statement among the given options related…

Q: Which is not true of preference shares? *       A. Payment of dividends is mandatory if cumulative.…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: True or False:

A: Explanations: 1. Total capital of the firm depends upon the types of capital a firm has issued.…

Q: The company tend to raise financial capital through selling stocks in the secondary markets. Select…

A: There are two market one is primary market and other is secondary market.

Q: From the issuing firm's point of view, one advantage of preferred stock over bonds is   A)…

A: Preferred stock represents ownership in a company and is classified as a type of equity security. It…

Q: How are warrants used by corporations?

A: A stock warrant refers to the right to buy the shares of a company at a price point that has been…

Q: 4.The biggest advantage of common stockholders is that they have ___ which is not available in most…

A: Disclaimer: "Since you have posted multiple questions, we will solve the first question for you. If…

Q: True or False: The following statement accurately describes how firms make decisions related to…

A: Retained earnings Some part of net earnings can be distributed to its existing shareholders as…

Q: Which of the following statements is false? Group of answer choices Stocks are long-term securities…

A: Stocks are ownership while bonds are liabilities to the firm

Q: Which of the following statements is FALSE? O A. Public companies typically have access to much…

A: Public companies have large capital raised through public markets, hence statement (A) is true.

Q: 3. The cost of preferred stock Preferred stock is a hybrid security, because it has some…

A: The various funding sources like debt, preferred stock, and equity that makes up a firm's capital is…

Q: Using one of the articles, "Companies borrow and repay debt 'less than' they issue stock, because…

A: Companies typically borrow and repay debt for various reasons, such as financing operations, funding…

Q: Which of the following statements(s) is (are) false regarding preferred stock?   a. Preferred…

A: Preferred stock The type of shares that receive a fixed dividend from the company is known as…

Q: Which of the following statements is false regarding treasury shares? [A] purchasing treasury shares…

A: The treasury stocks are repurchased own shares of a company that are purchased from open market. The…

Q: All of the following are correct regarding stock dividends except:   1) total stockholders’ equity…

A: A stock dividend is a payment to shareholders that consists of additional shares rather than cash.…

Q: B. State whether each of the following statements is true or false, and briefly explain why. (i) In…

A: Dividend The part of the profit that is distributed to the shareholders by the company is known as…

Q: 3. Consider the following two statements concerning share issues: Statement (1): Retained profits…

A: Retained earnings is the profit retained in the company after paying dividend to its shareholders.…

Q: Nick Smith, the sole owner of Nick's Cleaning Service has $5,000 in equity in his business and he…

A: Since you have posted multiple questions, we will provide the solution only to the first question as…

Q: Which of the following statements is TRUE regarding Stocks? O A. Stocks typically have very…

A: A stock also known as equity or a share is a type of financial security which represents the…

Q: Which of the following is a feature associated with preferred stock? Preferred stockholders are…

A: Preferred stocks are a hybrid type of security and these have the option of constant payments like…

Q: ll of the following are rationales given for a stock dividend or split EXCEPT   A. there is…

A: A dividend is a benefit given to shareholders by publicly traded firms, and it is funded by the…

Q: -) Which of the following is NOT a reason companies purchase their own stock as treasury stock? O…

A: Treasury stock, also known as treasury shares or reacquired shares, refers to shares of a company's…

Q: Consider each of the following statements, state whether you believe they are true or false and…

A: NOTE: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

Q: Which of the following statements(s) is (are) true regarding preferred stock?   a. Preferred stock…

A: Preferred stock refers to the stock who are issued at the par value and dividend are to be paid on…

Q: Which of the following is true? Select one: a. None of the options. b. Treasury shares must be sold…

A: The treasures shares are the shares which are repurchased by the company.

Q: Which one of the following accurately describes the features of preferred stock? Preferred dividends…

A: Preferred stocks are hybrid kind of security and they have features of bonds and features of equity…

Q: Stock dividends are ________ costly to issue than cash dividends. What is the missing word?

A: Cash dividend is exposing company to double taxation. The cash dividend is taxable in the hands of…

Q: One of the advantages to the firm of financing with preferred stock is that 65% of the dividends…

A: Preferred stockholders are the shareholders to whom dividends are paid out before paying to the…

Q: What is true about common stock?     It is best described by the word equity and does NOT have…

A: Meaning of common stock:Common stock represents shares of ownership in a company and the common…

Q: Preferred stocks are characterized by all the following, except a. the dividends declared for the…

A: Preferred stocks have different features in comparison to common stocks of the company. These have…

Q: An investor in which of the following types of investments is most likely to rely on profits that do…

A: Preferred stock is a capital market instrument that offers the investor a constant flow of dividends…

Q: Preferred stock is a hybrid security, because it has some characteristics typical of debt and others…

A: Preferred shares represent a form of ownership in a corporation, granting shareholders certain…

Q: Dual class stock is generally designed to Provide bigger dividends to majority owners.  Help…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements is true? Group of answer choices a. Dividend payments are…

A: Option B is True. Executive and Insider have many non public or Insider information which can…

Q: Preferred stock is a hybrid security, because it has some characteristics typical of debt and others…

A: Preferred stocks are the shares of a company's stock. The holders of preferred stocks are called the…

Q: The biggest advantage of common stockholders is that they have __________ which is not available…

A: Equity shareholders are the investors that invest into the ownership of the company. They are the…