What Is the Significance of the Term "Preferred" in Reference

question 93

Multiple Choice

What is the significance of the term "preferred" in reference to the term "preferred stock?"

• A) It is generally considered to be a worse investment than common stock.
• B) Preferred stockholders usually have greater voting rights than common stockholders.
• C) In the event of corporate liquidation, holders of common stock are paid before holders of preferred stock.
• D) In the event of corporate liquidation, preferred stockholders receive certain preferences over common stockholders with respect to dividends or assets.
• E) Only shareholders owning a certain minimum amount of common stock are entitled to purchase preferred stock.

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Definitions:

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The act of officially recording information or data into a formal system or registry, often necessary for legal recognition or validity.

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