Preferred Stock Multiple Choice Questions with Answers – PDF Download

MCQ 1: The preferred stock is considered as hybrid security because it includes:

1. representation of ownership interest
2. fixed periodic payment
3. higher liquidity
4. both A and B

MCQ 2: The type of preferred stock in which the dividend does not increase or decrease with the increase or decrease in profit of firm is classified as:

1. non-cumulative preferred stock
2. cumulative preferred stock
3. non-participating preferred stock
4. participating preferred stock

MCQ 3: The type of preferred stock whose dividend payments are never paid to stock holders and are not considered in arrears is classified as:

1. non-participating preferred stock
2. participating preferred stock
3. non-cumulative preferred stock
4. cumulative preferred stock

MCQ 4: The type of preferred stock whose payments are missed and must be paid before paying dividends of common stock is classified as:

1. non participating preferred stock
2. participating preferred stock
3. non-cumulative preferred stock
4. cumulative preferred stock

MCQ 5: The security which has characteristics of common stock and bonds both at same time is classified as:

1. preferred stock
2. voted stock
3. cumulative stock
4. fundamental stock