Classification of preferred stock and common stockidentify

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Classification of preferred stock and common stock

Identify whether the characteristic listed below describes common stock (CS) or preferred stock (PS).

__PS___ (1) May have cumulative and participating features.

__CS___ (2) Increases the firm's borrowing power.

__CS___ (3) Used often in mergers.

__PS___ (4) Source of financing which places minimum constraints on the firm.

__PS___ (5) frequently includes a call feature.

__CS___ (6) Reserves a preemptive right allowing stockholders to maintain their proportionate share in the firm.

__CS___ (7) Last to receive earnings or distribution of assets in the event of bankruptcy.

__PS___ (8) May be convertible into another type of security.

__CS___ (9) Potential dilution of earnings and voting power.

__PS___ (10) Fixed financial obligation.

Reference no: EM13356925

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