Which of the following is NOT true regarding common stock? Select one: a. Common

Question

Which of the following is NOT true regarding common stock?

Select one:

a. Common stock, unlike bond principal, does not mature.

b. Dividend payments, like interest payments, are fixed.

c. Dividends, unlike interest payments, are not tax deductible.

d. Common stockholders are owners of the firm, whereas bondholders are creditors.'

Which of the following statements is true?

Select one:

a. Long-term bonds have greater interest rate risk than do short-term bonds.

b. Short-term bonds have greater interest rate risk than do long-term bonds.

c. All bonds have equal interest rate risk.

d. Interest rate risk is highest during periods of high interest rates.

Explanation / Answer

Dividend payments like interest payments are fixed is not true regarding common stock holders as the dividend distributed to shareholders is not fixed it depends on the profits of the company if the profit is high then the company distributes highe dividend if the profits are less then the company distributes less dividen

Long-term bonds have greater interest rate risk than do short-term bonds

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