Which ONE of the following statements is NOT true about preferred stock?
a. Preferred dividend payments are fixed amounts paid regularly by the firm, similar to the interest payments on corporate bonds.
b. Preferred dividends are deductable from taxable income just like the interest on bonds.
c. Preferred stock holders have limited voting privileges relative to common-stock owners.
d. While preferred stock is legally classified as perpetuities, some issues do have a fixed maturity.
Answer: B
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FIN202 Chapter 9
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- Owners of preferred stock
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- In brokered markets
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