Question

Which best describes the difference between preferred and common stocks?

Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights.
Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.
Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends.
Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.

Answer 1

Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not typically have voting rights. Preferred shareholders generally have priority for dividends and in liquidation, but usually lack voting power.