WGU C214 Financial Mgmt Exam Questions and Answers, Pass the OA(SCORED A)

Characteristics of preferred stock includes - ANSWER--dividends in arrears -dividends are cumulative -higher payoff claim in a BK (has first dibs in a BK) -considered "hybrid" (part stock/part bond) -no fixed maturity date -no voting rights -can skip dividend payments -dividends don't change year-after-year -used in start ups (IPO) Preferred stock dividends - ANSWER-can go without payment and pay in arrears the following year Characteristics of common stock are - ANSWER--voting rights -no maturity date -corporate governance -lower payoff claim in BK -variable returns -unlimited earnings potential -earnings are in dividends & the increase in price of stock New start up ventures often issue - ANSWER-preferred stock (in an IPO) What stock is considered a hybrid - ANSWER-preferred stock One thing common stock and preferred stock have in common is - ANSWER-both have no maturity date Which type of security has voting rights - ANSWER-common stock