Which of the following statements is most correct?
A) Preferred stockholders have priority over common stockholders.
B) A big advantage of preferred stock is that preferred stock dividends are tax deductible for the issuing corporation.
C) Most preferred stock is owned by corporations.
D) Statements a and b are correct.
E) Statements a and c are correct.

Question

Quizplus · Accepted Answer

Preferred stockholders have priority over common stockholders in terms of dividend payments and claims on assets in the event of liquidation. Additionally, most preferred stock is owned by corporations due to tax advantages, as corporations can exclude a portion of the dividends received from taxable income.

Which of the Following Statements Is Most Correct