Which of the following best describes preferred stock?
A) Like an indenture, it represents a legal obligation to the firm to pay dividends.
B) Like common stock, it represents an equity claim on the assets and earnings of the firm.
C) Like a bond, it pays out a fixed stream of income ahead of any common stock dividends.
D) All of the above are correct.
E) Only B and C are correct.
Answer: E
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The group important in setting the organization's overall strategic goals and for approving major decisions and salaries of top management is known as
a. employees. b. stockholders. c. the board of directors. d. investors. e. intrapreneurs.
All of the following are accounting factors that can drive a firm's price-earnings ratio in a given period to be higher than that of other firms in the same industry except:
a. non-recurring expenses or losses in that period b. a greater degree of accounting conservatism that requires expensing R&D or other intangible asset-generating activities c. a less conservative accounting stance that uses straight-line depreciation rather than accelerated methods. d. a greater degree of accounting conservatism regarding accelerated depreciation of PP&E
With the Altman model, the higher the Z score, the more likely the firm will go bankrupt
Indicate whether the statement is true or false
Both the allowance method and the direct charge-off method are acceptable for tax purposes
Indicate whether the statement is true or false