The difference between common and preferred stock is that preferred stock
A)may or may not receive dividends.
B)has predictable income and more safety.
C)has greater potential for capital appreciation.
D)is issued more frequently than common.

Question

Quizplus · Accepted Answer

Preferred stock has predictable income and more safety compared to common stock. Common stock holders only receive dividends if the company declares them, while preferred stockholders have a priority in receiving dividends. Preferred stock is also less volatile compared to common stock and provides a fixed dividend payment, making it a safer investment option.

The Difference Between Common and Preferred Stock Is That Preferred