Homework Help: investing 3-2

Posted by Johnny on Sunday, February 22, 2009 at 12:03am.

Which of the following preferred stock properties would
provide the best argument favoring purchase of preferred
stock by an investor?

A. When long-term bond yields decline, the value of preferred
stock can potentially rise.

B. Because preferred stock trading volume is lower than
common stock trading volume, preferred stock prices are
less volatile than common stock prices.

C. The yield differential between preferred stock and
bonds is smaller than would be expected on the basis
of risk differentials.

D. Preferred stockholders receive preferential treatment over
lower-class, common stockholders when the corporation
earns sufficient profit to pay creditors and shareholders.

I would think it's D, but not sure

investing 3-2 - Anonymous, Friday, November 26, 2010 at 5:40pm
The answer is A.
When long-term bond yields decline, the value of preferred
stock can potentially rise.

Answer this Question

Related Questions

investing 3-4 - 4. Which of the following is the best conclusion, given only the...
Finance - A firm has $3 million market value and it sells preferred stock with a...
Finance - Assume AirJet Best Parts has also a preferred stock issue. The most ...
accounts - A prospective investor has hired you to develop a worksheet that will...
Finance - Preferred stock differs from common stock in that preferred stock: ...
Managerial Finance - A firm has an issue of preferred stock outstanding that has...
umdnj - A company has preferred stock that can be sold for $21 per share. The ...
Finance - Preferred stock question. I need help with part b. A share of ...
Finance - Preferred stock question. I need help with part b. A share of ...
Finance - Preferred stock question. I need help with part b. A share of ...

For Further Reading

First Name:
School Subject:
Answer: