The dividend on preferred stock is most similar to
A) a common stock with no growth in dividends.
B) a common stock with a constant growth in dividends.
C) a common stock with a variable growth in dividends.
D) a certificate of deposit.

Question

Quizplus · Accepted Answer

The dividend on preferred stock is typically a fixed amount, similar to a bond coupon payment, and does not usually increase over time. This is similar to a common stock with no growth in dividends. Therefore, the best choice is A.

The Dividend on Preferred Stock Is Most Similar to