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Preferred Stock Is Sometimes Regarded Like a Debt Security Because

Question 41

Multiple Choice

Preferred stock is sometimes regarded like a debt security because


A) legally preferred stock is a debt security.
B) preferred dividend payments like bond interest payments are fixed amounts regardless of the firm's earnings.
C) preferred dividends are deductable from taxable income just like interest payments on bonds.
D) preferred stock holders receive a residual value and not a stated value.

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