The advantages of issuing preferred stock from the common stockholder's perspective include all of the following EXCEPT
A) seniority of preferred stockholder's claim over common stockholders.
B) flexibility.
C) use in mergers.
D) increased leverage.

Question

Quizplus · Accepted Answer

Preferred stockholders have a senior claim over common stockholders, which is a disadvantage for common stockholders, not an advantage.

The Advantages of Issuing Preferred Stock from the Common Stockholder's