Michael bought stock in a large consumer products company. As a stockholder, he is prioritized in the distribution of a firm's dividends, but he doesn't have voting and control rights. What type of stockholder is Michael?
A) a common stockholder
B) a proxy stockholder
C) a preemptive stockholder
D) a secured stockholder
E) a preferred stockholder

Question

Quizplus · Accepted Answer

Michael is a preferred stockholder. Preferred stock is corporate ownership that gives the stockholder preference in the distribution of the company's profits but not the voting and control rights accorded to common stockholders. Thus, the primary advantage of owning preferred stock is that it is a safer investment than common stock.

Michael Bought Stock in a Large Consumer Products Company