A firm's founder sells equity to outside investors for the first time in the form of preferred stock.In what way is this preferred stock most likely to differ from the preferred stock issued by an established public firm?

Question

Quizplus · Accepted Answer

Preferred stock issued by an established public firm usually pays cash dividends, while a start-up company's preferred stock is more likely to prioritize retaining earnings for growth and expansion over paying out cash dividends.

A Firm's Founder Sells Equity to Outside Investors for the First