Which of the following is NOT a characteristic of preferred stock as an investment?
A)Preferred stockholders are entitled to receive their dividend prior to payment of dividends to common stockholders
B)Preferred stock dividends are taxed at the capital gains rate for individual investors
C)Preferred stock dividends may be omitted by the corporation under certain circumstances
D)It is a hybrid security of common stock and debt

Question

Quizplus · Accepted Answer

The tax law provides that any corporation that receives preferred or common stock dividends from another corporation must add only 30 percent of such dividends to its taxable income.

Which of the Following Is NOT a Characteristic of Preferred