127. CSO: 2B3e LOS: 2B3b Which one of the following describes a disadvantage to a firm that issues preferred stock? a. Preferred stock dividends are legal obligations of the corporation. b. Preferred stock typically has no maturity date. c. Preferred stock is usually sold on a higher yield basis than bonds. d. Most preferred stock is owned by corporate investors.

2B3B WHICH ONE OF THE FOLLOWING DESCRIBES A DISADVANTAGE TO A FIRM TH...

CMA EXAM SUPPORT PACKAGE 2

127.

CSO: 2B3e

LOS: 2B3b

Which one of the following describes a disadvantage to a firm that issues preferred

stock?

Preferred stock dividends are legal obligations of the corporation.

Preferred stock typically has no maturity date.

Preferred stock is usually sold on a higher yield basis than bonds.

Most preferred stock is owned by corporate investors.