Which of the following statements is true?
A) Convertible preferred stockholders receive quarterly interest payments.
B) Common stockholders receive a fixed dividend, and they are entitled to it before preferred stockholders get anything.
C) Convertible preferred stock can be converted into preferred stock at a predetermined price.
D) Many buyers of common stock are more interested in capital gains than in dividends.

Question

Quizplus · Accepted Answer

Many buyers of common stock are more interested in the potential for the stock price to increase (capital gains) rather than receiving regular dividend payments. The other statements are incorrect: A) Preferred stockholders typically receive dividend payments, not interest payments, and not necessarily quarterly; B) Preferred stockholders have priority over common stockholders in terms of receiving dividends; C) Convertible preferred stock can be converted into common stock, not back into preferred stock.

Which of the Following Statements Is True