Which of the following is not a true statement?
A)A corporation generally obtains equity capital from stockholders.
B)A corporation can issue both preferred stock and common stock.
C)When a corporation is experiencing financial problems, an investor should purchase common rather than preferred stock.
D)Most corporations sell common stock to satisfy a large part of their financing needs.
E)The most important priority a preferred stockholder enjoys is receiving cash dividends before common stockholders receive cash dividends.

Question

Quizplus · Accepted Answer

When a corporation is experiencing financial problems, it may not be wise to purchase either common or preferred stock. In fact, it may be best to avoid investing in the company altogether until it has resolved its financial issues.

Which of the Following Is Not a True Statement