Which of the Following Is an Advantage of Preferred Stock

question 31

Multiple Choice

Which of the following is an advantage of preferred stock?

• A) Preferred shareholders are guaranteed that they will not take a loss on their investment.
• B) Preferred shareholders have higher voting rights than common shareholders.
• C) Preferred shareholders may sell their shares for a price higher than that of common stock.
• D) Preferred shareholders have the first claim on dividend funds.

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Definitions:

Corporation Commission

A regulatory body that oversees corporations, ensuring compliance with laws and regulations related to incorporation, securities, and other business activities.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, making them part owners of the company.

Board of Director's Approval

Formal sanction or consent given by a company's board for specific actions or decisions.

Assets

Economic resources or valuable items owned by an individual or business, capable of being converted into cash.