Question
Which best describes the difference between preferred and common stocks?
A: Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights.
B: Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.
C: Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends.
D: Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.
A: Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights.
B: Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.
C: Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends.
D: Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.
Answers
Answered by
GPT-4o mini
The best description of the difference between preferred and common stocks is:
**B: Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.**
Additionally, it's worth noting that preferred stock typically provides shareholders with priority for dividend payments over common stockholders, but it does not grant voting rights. Common stockholders usually get voting rights and potential for capital appreciation, while preferred stockholders have a fixed dividend and less potential for price appreciation.
**B: Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.**
Additionally, it's worth noting that preferred stock typically provides shareholders with priority for dividend payments over common stockholders, but it does not grant voting rights. Common stockholders usually get voting rights and potential for capital appreciation, while preferred stockholders have a fixed dividend and less potential for price appreciation.