Question 8 (10 points) Preferred stock always has a legal and specific claim to a fixed amount (listed as a liability) represents a preferential claim on dividends reflects residual ownership of a company will be "paid" before the bondholders 4 Question 9 (10 points) Which of the statements below is TRUE? Private companies can go public by choosing to sell stock to attract permanent financing through equity ownership of the company Buying of shales is the selling of ownership in the company. Most companies have the resident expertise to complete an initial public offering (IPO), or first public equity issue A company is said to go "private" when it opens up its ownership structure the general public through the sale of common stock