Which statement is correct about common stocks and preferred stocks? A. Preferred stockholders have the right...
Which statement is correct about common stocks and preferred stocks?
A. Preferred stockholders have the right to vote on all company issues.
B. Common stocks and preferred stocks are essentially the same.
C. A fixed amount of dividend interest is paid to common stockholders periodically.
D. Common stockholders have the right to purchase newly issued stocks before preferred stockholders.
Homework Answers
Answer: Option D is correct.
Option A is incorrect because, preferred stock carries no voting
rights, however common stock does
Option B is incorrect because common stocks and preferred stocks
are different.
Option C is incorrect because it is not mandatory for a company to
pay fixed amount of dividend to common stockholders
periodically.
Option D is correct. It is a benefit of owning common stock. It is
called preemptive rights.
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