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Owners of preferred stock:

A) have limited voting rights.
B) usually receive fixed dividend payments.
C) are given priority treatment over common stock with respect to dividends payments, and the claims against the firm's assets in the event of bankruptcy or liquidation.
D) All of the above statements are true.

1 Answer

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Final answer:

Owners of preferred stock have limited voting rights, are generally entitled to fixed dividend payments, and are prioritized over common stockholders for dividends and claims on assets in case of bankruptcy or liquidation.

Step-by-step explanation:

Owners of preferred stock indeed possess unique characteristics compared to holders of common stock. Firstly, they typically have limited voting rights, often not participating in the election of the board of directors or decisions that affect the company's governance.

Secondly, holders of preferred stock usually receive fixed dividend payments, which tend to be higher than those of common stock and are paid out before dividends to common stockholders. Lastly, in the unfortunate event of bankruptcy or liquidation, preferred stock owners are given priority treatment over common stockholders when it comes to dividends payments and claims against the firm's assets.

Therefore, the correct answer to the question is D) All of the above statements are true about owners of preferred stock.

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