Preferred stock is preferred over common stock in terms of both its claim on assets if the company goes bankrupt (option A) and its claim on income for dividend payments (option B). However, preferred stock typically does not have voting rights (option C).

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Preferred Stock Is

Question 55

Multiple Choice

Preferred stock is:

A) preferred over common stock with regard to its claim on assets if the firm fails.
B) preferred over common stock with regard to its claim on income for dividend payment.
C) preferred over common stock with regard to voting rights.
D) a and b

Correct Answer: