SIE practice questioneasyPreferred Stock — Features Comparison
Compared to common stock, preferred stock typically offers:
- AA fixed dividend and higher claim on assets in liquidation✓ Correct answer
- BNo dividend payments but guaranteed capital gains
- CHigher voting rights and lower dividend priority
- DGreater capital appreciation potential
Explanation
Why A — A fixed dividend and higher claim on assets in liquidation
Preferred stock typically pays a fixed dividend and has priority over common stock for dividends and liquidation claims. It generally has limited voting rights and less capital appreciation potential than common stock.
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