Which of the following are characteristics of preferred stock? I) It pays its holder a fixed amount of income each year at the discretion of its managers.
II) It gives its holder voting power in the firm.
III) Its dividends are usually cumulative.
IV) Failure to pay dividends may result in bankruptcy proceedings.
A) I, III, and IV
B) I, II, and III
C) I and III
D) I, II, and IV
E) I, II, III, and IV Only I and III are true.

Question

Quizplus · Accepted Answer

Preferred stock pays a fixed amount of income each year at the discretion of its managers (I), and its dividends are usually cumulative (III). However, preferred stockholders do not have voting power in the firm (II), and failure to pay dividends does not usually result in bankruptcy proceedings (IV).

Which of the Following Are Characteristics of Preferred Stock? I)