Generally the Major Difference Between Preferred Shares and Common Shares

question 80

Multiple Choice

Generally the major difference between preferred shares and common shares is:

• A)preferred shares are restricted by the amount of dividends that can be paid out.
• B)common shares have a priority claim over corporate assets.
• C)preferred shares have voting rights.
• D)there are no significant differences between preferred and common shares.

---

Definitions:

Interest Rate

The percentage of a sum of money charged by a lender to a borrower for the use of money, typically expressed as an annual percentage.

Quantity of Money Demanded

The total amount of money that households and businesses in an economy want to hold at a given time, based on interest rates and economic activity.

Money Supply

The bulk sum of assets in monetary form within an economy at a particular moment.

Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, used as a measure of economic performance.