SIE Exam Practice Question 114
Question: 114
Which of the following characteristics are true of preferred stocks?
I. Have a prior claim on the income and assets of the issuing firm
II. Have fixed dividends
III. Issued as an alternative to debt
IV. Have an effect on EPS
Correct Answer: C
Explanation:
Preferred stocks have a prior claim on the income and assets of the issuing firm, have fixed dividends, and are issued as an alternative to debt, but do not have an effect on EPS.
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