What is a primary characteristic of preferred stock? A) It provides voting rights to shareholders. B) It requires a higher initial investment than common stock. C) It has lower cla... What is a primary characteristic of preferred stock? A) It provides voting rights to shareholders. B) It requires a higher initial investment than common stock. C) It has lower claim on assets than bonds. D) It usually guarantees dividends.
Understand the Problem
The question is asking about the primary characteristic of preferred stock among the given options, essentially testing knowledge on the features that distinguish preferred stock from other types of stock and securities.
Answer
D) It usually guarantees dividends.
The final answer is D) It usually guarantees dividends.
Answer for screen readers
The final answer is D) It usually guarantees dividends.
More Information
Preferred stock often comes with a fixed dividend, which is a regular payout to shareholders, making it a priority over common stock regarding dividends. This is one of the primary reasons investors choose preferred stock.
Sources
- Preferred Stock - Investopedia - investopedia.com
- Preferred stock - Wikipedia - en.wikipedia.org
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