Problem

For the following questions, circle the best response.Similarities between preferred stock...

For the following questions, circle the best response.

Similarities between preferred stock and long-term debt (bonds) include all of the following except

a. each has a fixed claim to annual income (dividends and interest, respectively).

b. each has a fixed claim on assets (liquidating value and principal amount, respectively).

c. each allows the corporation a tax deduction (dividends and interest, respectively).

d. each may be callable and/or convertible.

e. All of the above are similarities between preferred stock and long-term debt (bonds).

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