Expected cash flow for a preferred stock primarily consists of
A) dividend payments .
B) changes in the price of the stock.
C) interest payments.
D) both A and B.

Question

Quizplus · Accepted Answer

Preferred stock is a type of stock that pays consistent dividends to its shareholders. Therefore, the expected cash flow for a preferred stock primarily consists of dividend payments to the shareholder. Changes in the stock price may also provide additional returns, but they are not a part of the expected cash flow. Interest payments are associated with debt instruments, not preferred stock.

Expected Cash Flow for a Preferred Stock Primarily Consists of