Preferred dividends are not generally cumulative

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Reference no: EM131901797

Which of the following statements is CORRECT?

a. Preferred dividends are not generally cumulative.

b. A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation.

c. Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in a liquidation.

d. The preferred stock of a given firm is generally less risky to investors than the same firm's common stock. e. Corporations cannot buy the preferred stocks of other corporations.

2. CAPM. Please name at least four assumptions behind CAPM and discuss why these assumptions might not be satisfied in real life. You may base your answer on different sources but be sure to indicate the references.

Reference no: EM131901797

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