Preferred stock share prices tend to act much like bond prices - so long as the firm is not experiencing any financial distress.

Question

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Preferred stock share prices are typically less volatile than common stock since they have a fixed dividend rate and are more closely tied to interest rates like bonds. However, if a firm is experiencing financial distress, preferred shareholders may not receive their dividends and the share price may decrease more significantly.

Preferred Stock Share Prices Tend to Act Much Like Bond