When investors purchase ________ stock, they receive a priority claim in the payment of dividends, as well as assets if the business is liquidated. However, these investors do not have voting rights.

Question

Quizplus · Accepted Answer

Preferred stock has the characteristics mentioned in the statement. Common stockholders have voting rights but do not have priority in dividends or assets during liquidation. Secured and debenture stocks refer to different types of debt securities and do not have the same characteristics as preferred stock.

When Investors Purchase ________ Stock, They Receive a Priority Claim