True about the payment of dividends by firm

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Reference no: EM131962617

1. Which of the following is true about the payment of dividends by a firm?

Growth stocks pay little or no dividends and instead retain most of their earnings each year

Preferred stocks will pay accumulated dividends only once i.e. at the time of maturity

Dividends are paid only to the bondholders of the firm

Common stockholders will receive a fixed amount of dividend every year

Common stockholders have priority over preferred stockholders with regard to dividends

2. Rebecca is currently working, but is planning to start a college in few years. For this purpose, she would need $20,000. Today she can start investing $750 monthly in an investment account that pays 6 percent compounded monthly. How long would it take her to have enough money to start college?

24.98 months

22.56 months

21.25 months

27.78 months

30.25 months

Reference no: EM131962617

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