Which of the following is true of preferred stock?

Question

Quizplus · Accepted Answer

Preferred stockholders usually receive a fixed amount of dividends before common stockholders. This is one of the primary reasons why preferred stock is considered less risky than common stock. However, preferred stockholders do not have higher voting rights than common stockholders, and there is no guarantee that they will not take a loss on their investment. The value of preferred stock can fluctuate based on market conditions and interest rates, and preferred stockholders may sell their shares for a price higher or lower than that of common stock, depending on demand and supply.

Which of the Following Is True of Preferred Stock