The Main Difference(s) Between a Preferred Stock in Company a That

question 5

Multiple Choice

The main difference(s) between a preferred stock in Company A that pays a $2.50 per share annual dividend and a common stock in Company A that also pays a $2.50 per share current annual dividend is (are)

• A) the common stock has potential for price appreciation due to company earnings growth.
• B) the common stock dividend may increase but the preferred dividend is generally fixed.
• C) the common stock could lose value if the company performance were to suffer.
• D) All of the above are real differences between preferred and common stock in the same company.