2026 Wgu C214 Financial Management: Complete Exam Guide With

2026 WGU C214 FINANCIAL MANAGEMENT: COMPLETE EXAM GUIDE WITH 80 VERIFIED QUESTIONS & RATIONALES 1. Characteristics of preferred stock includes - ANSWER - dividends in arrears dividends are cumulative higher payoff claim in a BK (has first dibs in a BK) considered "hybrid" (part stock/part bond) no fixed maturity date no voting rights can skip dividend payments dividends don't change year-after-year used in start ups (IPO) Rationale: Preferred stock combines features of both debt and equity. It has priority over common stock in dividend payments and bankruptcy claims but typically does not carry voting rights. The cumulative feature allows missed dividends to accumulate as dividends in arrears. 2. Preferred stock dividends - ANSWER - can go without payment and pay in arrears the following yearRationale: Unlike bond interest payments which are legally required, preferred stock dividends can be skipped without causing bankruptcy. However, if the stock is cumulative, any missed dividends must be paid before common stockholders can receive dividends. 3. Characteristics of common stock are - ANSWER - voting rights no maturity date corporate governance lower payoff claim in BK variable returns unlimited earnings potential earnings are in dividends & the increase in price of stock Rationale: Common stock