The term preferred comes from the fact that preferred ...

[amal]

The term preferred comes from the fact that preferred shareholders receive all past (if cumulative) and present dividends before common shareholders can receive any cash dividendsin other words,
 
  their dividend claims are preferred over common stock dividend claims.
  Indicate whether the statement is true or false.

Question 2

In valuing preferred stock, we can use either the constant dividend model or the growth model with a positive growth rate.
 
  Indicate whether the statement is true or false.

[sarah_brady415]

Answer to Question 1

Answer: TRUE

Answer to Question 2

Answer: FALSE
Explanation: In valuing preferred stock, we can use either the constant dividend model or the growth model with a ZERO growth rate.