The most important priority that an investor in common stock enjoys is receiving cash dividends before preferred stockholders are paid any cash dividends.

Question

Quizplus · Accepted Answer

The most important priority that an investor in common stock enjoys is the potential for capital appreciation, or an increase in the stock price. Common stockholders do not have priority over preferred stockholders when it comes to receiving cash dividends. Preferred stockholders typically have a fixed dividend rate, and are paid their dividends before common stockholders receive any dividend payments.

The Most Important Priority That an Investor in Common Stock