When Investors Purchase ________ Stock, They Receive a Priority Claim

question 241

Multiple Choice

When investors purchase ________ stock, they receive a priority claim in the payment of dividends, as well as assets if the business is liquidated. However, these investors do not have voting rights.

• A) common
• B) preferred
• C) secured
• D) debenture

---

Definitions:

Defined Benefit Plan

A type of pension plan where the employer guarantees a specified pension payment in retirement, based on factors like salary history and duration of employment.

Defined Contribution Plan

A type of retirement plan in which the employer, employee, or both make contributions on a regular basis, but the future payout is not defined.

Pension Expense

The cost recognized by an employer for contributions to a defined benefit pension plan based on formulas that factor in salary, years of service, and other elements.

Expected Earnings

The forecasted profit or loss for a company or investment, often used in the valuation of companies.