Which of the following is NOT one of the common features between preferred stock and common stock? O No fixed maturity date O Failure to pay dividends does not lead to bankruptcy O Payments are fixed O Dividends are not a tax-deductible expense

If you short-sell a stock and it pays a dividend while your short sale is open, then O A. You are unaffected (i.e., you do not receive nor do you pay the dividend) B. You have to pay the dividend to the lender OC. You receive the dividend

Quèstion 1 Stock price never reacts to the unanticipated changes in the dividend. As it has no effect on stock price. O True O False

Which of the following is a feature associated with preferred stock? Preferred stockholders are entitled to dividends Preferred stock is not perpetual in nature Preferred stockholders do not have voting rights In case of liquidation, preferred stockholders have less priority over common stockholders Dividends on any type of preferred stock do not accumulate in arrears and are not paid at a later date if firms are currently unable to pay