Preferred stock is compensated for not having ownership privileges by offering a fixed dividend stream supported by a binding contractual obligation.

Name: Preferred stock is compensated for not having ownership privileges by offering a fixed dividend stream supported by a binding contractual obligation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Preferred stock does not have a binding contractual obligation for dividends like bonds do; dividends are typically fixed but can be suspended by the company.

Preferred Stock Is Compensated for Not Having Ownership Privileges by Offering