Question

One advantage of preferred stock over common stock is that preferred stockholders

A. have the right to vote for the board of directors.
B. are entitled to a fixed dividend.
C. participate in managing the company.
D. get a cheaper price on stock.

Answer 1

Hi there!

The common stock owners have the opportunity to make more on their investment, because preferred stock owners have agreed to a fixed dividend payment, which means the owners get a set amount, and it can't go above that.

So your answer is B. are entitled to a fixed dividend.

-Your friend, ASIAX

Answer 2

B. are entitled to a fixed dividend is the correct answer.

Step-by-step explanation:

A preferred stock gives the stockholder the advantage of having priority over common stockholders when it is about dividends, which can be fixed in terms of a benchmark interest rate. Preferred stockholders have rights that doesn't usually include voting. Due to this, letter B is the correct answer.