Financial Accounting > QUESTIONS & ANSWERS > C214|Western Governors University|Financial Managment|Question and Answers |Graded A (All)
C214|Western Governors University|Financial Managment|Question and Answers |Graded A
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Characteristics of preferred stock includes Correct Answer: -dividends in arrears -dividends are cumulative -higher payoff claim in a BK (has first dibs in a BK) -considered "hybrid" (par... t stock/part bond) -no fixed maturity date -no voting rights -can skip dividend payments -dividends don't change year-after-year -used in start ups (IPO) Preferred stock dividends Correct Answer: can go without payment and pay in arrears the following year Characteristics of common stock are Correct Answer: -voting rights -no maturity date -corporate governance -lower payoff claim in BK -variable returns -unlimited earnings potential -earnings are in dividends & the increase in price of stock New start up ventures often issue Correct Answer: preferred stock (in an IPO) What stock is considered a hybrid Correct Answer: preferred stock One thing common stock and preferred stock have in common is Correct Answer: both have no maturity date Which type of security has voting rights Correct Answer: common stock Debt covenants and restrictions help to ensure that Correct Answer: management is meeting bond and shareholder expectations NOTE: covenants are promises meant to be kept What is true regarding bonds Correct Answer: -when bond matures, bondholder gets lump sum back [Show More]
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