Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Preference shares are often referred to as "preferred stock" because they have priority over common shares in terms of receiving fixed dividends. Therefore, option B is correct. Option A is incorrect because preference shares typically do not carry any voting rights, or carry less voting rights than common shares. Option C is incorrect because preference shares are generally considered less risky than common shares due to their fixed dividend payments. Option D is incorrect because dividend payments on preference shares must be made before any payments can be made on common shares.

Which of the Following Statements Is Correct