Multiple Choice
Equivalent units of production under the weighted-average method equals:
25
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7. Receivables and Investments
Introduction to Investments in Securities
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Which type of securities are most appealing to investors primarily because of the dividends they pay out?
A
Common stocks
B
Preferred stocks
C
Corporate bonds
D
Treasury bills
Verified step by step guidance1
Understand the types of securities listed in the problem: Common stocks, Preferred stocks, Corporate bonds, and Treasury bills.
Learn the characteristics of each type of security: Common stocks typically offer voting rights and potential for capital gains but dividends are not guaranteed. Preferred stocks provide fixed dividends and have priority over common stocks in dividend payments. Corporate bonds are debt instruments that pay interest, not dividends. Treasury bills are short-term government securities that do not pay dividends but are sold at a discount and mature at face value.
Focus on the key aspect of the question: Which type of security is most appealing to investors primarily because of the dividends they pay out?
Recognize that preferred stocks are designed to provide consistent dividend payments, making them particularly attractive to investors seeking income from dividends.
Conclude that preferred stocks are the correct answer based on their fixed dividend feature and priority in dividend payments over common stocks.
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