Final answer:
Preferred stock pays dividends before common stock.
Step-by-step explanation:
Of the given options, the true statement about preferred stock is that it pays dividends before common stock. Preferred stock is a type of stock that typically pays a fixed dividend to shareholders before any dividends are paid to common stockholders. Unlike common stock, preferred stockholders do not typically have voting rights in corporate decisions nor does preferred stock represent ownership in the company. Preferred stock also does not mature after a fixed period.