A common stock that pays a constant dividend can be valued as if it were
A) a corporate bond.
B) a stock paying a growing dividend.
C) preferred stock.
D) a discount bond.

Question

Quizplus · Accepted Answer

A common stock that pays a constant dividend is similar to preferred stock, which also typically pays a fixed dividend. Therefore, the best choice is C. Other choices such as A, B, and D do not accurately reflect the characteristics of a stock paying a constant dividend.

A Common Stock That Pays a Constant Dividend Can Be