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When Comparing Preferred Stock to Common Stock and Bonds,which of the Following

Question 48

Multiple Choice

When comparing preferred stock to common stock and bonds,which of the following is incorrectly stated?


A) Preferred stock and bonds have a specific maturity date.
B) Both bonds and preferred stock pay a specific return to the investor.
C) Both preferred stock and common stock can pay dividends.
D) Both preferred stock dividends and common stock dividends become liabilities only when the board of directors declares them.
E) Common stock,and typically preferred stock,have indefinite lives.

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