What is an advantage to being a "preferred" stock holder?
A)Preferred stock holders always get to vote for the board of directors of the company.
B)Preferred stock holders receive a better coupon interest rate.
C)Preferred stock holders receive dividend payouts before common stock holders do.
D)Preferred stock holders never pay commissions on their stock trades.
E)There are no advantages to being a preferred stock holder.

Question

Quizplus · Accepted Answer

Preferred stock holders receive dividend payouts before common stock holders do. This means that in case of financial difficulties, the company can prioritize paying preferred stock dividends over common stock dividends. This makes preferred stock a more reliable source of income for investors. Additionally, preferred stock may also have a higher dividend rate compared to common stock.

What Is an Advantage to Being a "Preferred" Stock Holder