The name preferred stock is in reference to the fact that:
A)it is a type of corporate debt.
B)it is treated like debt for tax purposes.
C)preferred dividends must be paid in full before any additional interest may be paid.
D)preferred dividends must be paid in full before any common stock dividends can be paid.
E)fixed income traders prefer it to bonds.

Question

Quizplus · Accepted Answer

Preferred stock is called so because it has preference over common stock in terms of dividend payment. Companies are required to pay the full dividend on preferred stock before any dividend is paid to common stockholders.

The Name Preferred Stock Is in Reference to the Fact