Preferred stock is similar to a bond because: Group of answer choices all of these. it represents an ownership interest. it has a fixed amount to the investor. it has a maturity at which time the corporation repays par value.

Preferred stock is similar to a bond because: Group of answer choices all of these. it represents an ownership interest. it has a fixed amount to the investor. it has a maturity at which time the corporation repays par value.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter6: Bonds (debt) - Characteristics And Valuation

Section: Chapter Questions

Problem 1PROB

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Question

Preferred stock is similar to a bond because:

Group of answer choices

all of these.

it represents an ownership interest.

it has a fixed amount to the investor.

it has a maturity at which time the corporation repays par value.

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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