Which of the following statements is incorrect?
A) Preferred stock prices fluctuate with market interest rates and behave like corporate bond prices.
B) Common stock prices changes with the value of the company's underlying business.
C) Preferred stockholders have higher precedence for repayment than common stock in the event of firm liquidation from bankruptcy.
D) All of these choices are correct.

Question

Quizplus · Accepted Answer

All the statements provided are correct. Preferred stock prices do fluctuate with market interest rates similarly to corporate bonds, common stock prices change with the value of the company's underlying business, and preferred stockholders have a higher claim on assets than common stockholders in the event of liquidation.

Which of the Following Statements Is Incorrect