Preferred Stock Differs from Common Stock in That

question 12

Multiple Choice

Preferred stock differs from common stock in that

• A) preferred stock usually has a maturity date.
• B) preferred stock investors have a higher required return than common stock investors.
• C) preferred stock dividends are fixed.
• D) common stock investors have a required return and preferred stock investors do not.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them a portion of its ownership and sometimes rights to dividends and voting in corporate matters.

Hostile Takeover

An attempt by one company to acquire another without the agreement of the target company's management.

Market Value

The current price at which an asset or service can be bought or sold in the open market.

Stock

Equity units in a corporation, signifying a stake in the firm's profits and assets.