With preferred stock, shares have priority over common stock when dividends are paid out and those dividends are expressed as a percentage of par value.

Name: With preferred stock, shares have priority over common stock when dividends are paid out and those dividends are expressed as a percentage of par value.
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Preferred stock is issued with a stated par value; further, because preferred stocks has first rights to dividends, income is less risky than income from the same firm's common stock.

With Preferred Stock, Shares Have Priority Over Common Stock When