19. Which of the following forms of capital provides market discipline for the firm? O a. Preferred stock O b. Subordinated Debentures ¢ Common stock O d. Surplus 19. Which of the following forms of capital provides market discipline for the firm?O a. Preferred stockO b. Subordinated DebenturesO c. Common stockO d. Surplus

Answer- (B) Subordinated Debentures Subordinated Debentures is forms of capital provides market…

Answered: 19. Which of the following forms of…

19. Which of the following forms of capital provides market discipline for the firm? O a. Preferred stock O b. Subordinated Debentures ¢ Common stock O d. Surplus

Foundations of Business - Standalone book (MindTap Course List)

4th Edition

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section: Chapter Questions

Problem 4DQ

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Question

19. Which of the following forms of capital provides market discipline for the firm? O a. Preferred stock O b. Subordinated Debentures ¢ Common stock O d. Surplus

19. Which of the following forms of capital provides market discipline for the firm?
O a. Preferred stock
O b. Subordinated Debentures
O c. Common stock
O d. Surplus

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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