SIE practice questionmediumPreferred Stock
Which of the following is a typical characteristic of preferred stock?
- AGuarantees a return of principal
- BOffers the right to vote at annual meetings
- CPays a fixed dividend✓ Correct answer
- DIs tax-free to the investor
Explanation
Why C — Pays a fixed dividend
Preferred stock typically pays a fixed dividend. It usually does not offer voting rights, principal guarantees, or tax-free status.
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