Investment VehiclesQuestion 17 of 110
Which feature distinguishes preferred stock from common stock?
a.Preferred stockholders always have voting rights on corporate matters
b.Preferred dividends fluctuate with company profits
c.Preferred stock typically pays a fixed dividend and has priority over common in liquidation
d.Common stock has a stated par-based dividend that must be paid
Explanation
Preferred stock generally pays a fixed dividend and ranks ahead of common stock for dividends and in liquidation, though it usually lacks voting rights. Common stockholders normally vote but receive dividends only after preferred holders. Preferred dividends do not vary with profits like common dividends can.
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