Which of the following is a feature of a preferred stock?
A. Preferred stockholders have priority over debt holders, with regard to the distribution of earnings and assets of the firm.
B. Preferred stockholders can elect the members of the board of directors and also vote on corporate issues.
C. The firm generally pays different amounts of preferred stock dividends each year.
D. Preferred stockholders have the right to receive shares of any new common stock issues in proportion to their current ownership holdings.
E. Preferred stockholders have a higher priority claim to distributions made by the firm than common stockholders.
Answer: E
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The following information relates to the defined benefit pension plan of the Summersville Company for the year ending December 31 . 2014: Projected benefit obligation, January 1 ............... $4,600,000 Projected benefit obligation, December 31 ............. 4,729,000 Fair value of plan assets, January 1 .................. 5,035,000 Fair value of plan assets, December 31
5,565,000 Expected return on plan assets ........................ 450,000 Amortization of deferred gain ......................... 32,500 Employer contributions ................................ 425,000 Benefits paid to retirees ............................. 390,000 Settlement rate ....................................... 10% The net amount of the gain or loss component to be included in pension cost for 2014 would be a. $8,500 b. $32,500. c. $47,500. d. $77,500.
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