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

Question

Quizplus · Accepted Answer

I and III are characteristics of preferred stock. Preferred stock typically pays a fixed dividend, which is at the discretion of the company's board of directors, not guaranteed. These dividends are usually cumulative, meaning if they are not paid, they accumulate and must be paid out before common stock dividends. Preferred stock generally does not provide voting rights to its holders, distinguishing it from common stock. Also, failure to pay dividends does not directly lead to bankruptcy proceedings, as it might with debt obligations.

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