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.