Preferred Stock MCQ (Multiple Choice Questions) PDF Download

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

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

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

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

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