SIE practice questioneasyDividends
Which type of stock is typically eligible for dividend payments that are not guaranteed and may vary?
- ACumulative preferred stock
- BCommon stock✓ Correct answer
- CConvertible preferred stock
- DParticipating preferred stock
Explanation
Why B — Common stock
Common stock pays variable dividends that are not guaranteed and depend on company profits. All other options refer to types of preferred stock that usually have fixed dividends.
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