Preferred stock differs from common stock in that its holders have ____________________.

Question

Quizplus · Accepted Answer

Preferred stockholders have a preference to the assets of the firm in case of dissolution, meaning they have a higher claim on the company's assets and are paid out before common stockholders. While preferred stock may have a higher value per share than common stock, this is not always the case. Preferred stockholders do not typically have entitlement to more votes per share than common stockholders. Therefore, options B and C are not correct, making option D incorrect.

Preferred Stock Differs from Common Stock in That Its Holders