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Like bonds, preferred stock dividends can be omitted without fear of pushing the firm into bankruptcy...

  1. Like bonds, preferred stock dividends can be omitted without fear of pushing the firm into bankruptcy
  1. True
  2. False
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Answer #1

The statement is False.

Unlike bonds,preferred stock dividends can be omitted without fear of pushing the firm into bankruptcy.

Bond is an istrument which provides fixed income to its holder in the form of interest. It shows indebtedness of issuer. Interest on bonds can not be omitted without fear of pushing the firm into bankruptcy as payment of Interest is a legal obligation.

Preferred stock is a type of stock that has more feature than a common stock. Like bonds, they're eligible for fixed rate of dividend.Skipping the payment will not lead to bankruptcy.

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