Which of the Following Is an Advantage of Preferred Stock

question 144

Multiple Choice

Which of the following is an advantage of preferred stock?

• A) In the event of liquidation, preferred shareholders are guaranteed to get their investment back in full.
• B) In the event of liquidation, preferred shareholders have first claim on remaining corporate assets.
• C) In the event of liquidation, preferred shareholders may sell their shares for higher amounts than common stock.
• D) In the event of liquidation, preferred shareholders may retain their proportionate share of voting rights.

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Definitions:

Means

The average that is derived by adding up all the values of a given series and dividing by the number of values.

Teaspoon

A small spoon typically used for measuring or stirring liquids, equivalent to about 5 milliliters in capacity.

Abbreviation

The shortened form of a word or phrase, used to simplify longer terms without losing their meaning.

Deci-

A metric prefix denoting a factor of one tenth.