43.11

11. Circle all of the following that are true: (3)

1. Common stock is the residual claim on the firm's cash flows
2. Common stock typically has voting rights
3. The difference between preferred stock and common stock is that if a preferred dividend is missed, the company can be forced into bankruptcy.
4. Preferred stock is sometimes convertible into common stock.

a, b and d are true. Missing an interest payment can force a company into bankruptcy, but not a preferred dividend.

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