Preferred stock is called preferred because it usually has two preferences. These preferences relate to:
A) Dividends and voting rights.
B) Par and dividends
C) The preemptive right and voting rights.
D) Assets at liquidation and dividends.

Question

Quizplus · Accepted Answer

Preferred stock is called preferred because it typically has preferences over common stock in two main areas: dividends and assets in the event of liquidation. Preferred shareholders usually receive dividends before common shareholders and may have a higher claim on assets if the company is liquidated.

Preferred Stock Is Called Preferred Because It Usually Has Two