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Though They Are Classified as Equity, Why Are Preferred Shares

Question 41

Multiple Choice

Though they are classified as equity, why are preferred shares also similar to debt?


A) Both carry the same interest rate.
B) Dividends on preferred shares must be paid out before any common share dividends.
C) The voting structures for preferred shares and debt are equivalent.
D) Preferred shares have similar maturity structures to debt.

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