Question

Preferred stock differs from common stock in that
A) preferred stock usually has a maturity date.B) preferred stock investors have a higher required return than common stock investors.C) preferred stock dividends are fixed.D) common stock investors have a required return and preferred stock investors do not.

Answer 1

Answer: C) preferred stock dividends are fixed

Explanation:

Preferred stock are stocks that gives it holder the benefit of fixed divided and the payment takes precedence over the dividends of ordinary share holders.

Common stock are stock whose dividends are not stable, but depends on the income of the company's ordinary shares.