Preferred stock has all but which of the following characteristics?
A) No stated maturity.
B) A fixed dividend payment that carries a higher precedence than common stock dividends.
C) The same binding contractual obligation as debt.
D) Preferred lacks the ownership privilege of common stock.

Question

Quizplus · Accepted Answer

Preferred stock does not have the same binding contractual obligation as debt. Debt is a liability that must be repaid by the issuer, whereas preferred stock represents ownership in the company and does not have a guaranteed return of principal.

Preferred Stock Has All but Which of the Following Characteristics