Preferred Stock Is Less Risky for Investors Than Is Common

question 179

Multiple Choice

Preferred stock is less risky for investors than is common stock because:

• A) Common stock pays dividends as a stated percentage of face value.
• B) Common stock has priority over preferred stock with regard to earnings and assets.
• C) Preferred dividends are usually cumulative.
• D) Preferred stock with no conversion feature has a higher dividend yield than does convertible preferred stock.

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Definitions:

Work Permit

An official document granting a foreigner the permission to take employment in a country other than their own.

H2 Visa

A type of visa allowing individuals to come to the United States temporarily for seasonal agricultural work.

Government Authority

An organization or body with the power to enforce laws, regulate behavior, and oversee activities within a specific area.

Subsidiary

A company that is completely or partly owned and wholly controlled by another company, known as the parent company.