Which of the following makes preferred stock different from common stock?
A)Common stockholders receive dividends.
B)Common stockholders get paid after the bondholders.
C)Common stockholders can vote for the board of directors.
D)Dividends to common stockholders are tax deductible.

Question

Quizplus · Accepted Answer

Preferred stockholders typically do not have voting rights, while common stockholders can vote for the board of directors. Therefore, choice C is the correct answer.

A is incorrect because both preferred and common stockholders can receive dividends. 
B is incorrect because bondholders are not related to the comparison between preferred and common stock. 
D is incorrect because dividends to common stockholders are not tax deductible.

Which of the Following Makes Preferred Stock Different from Common