ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Common
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Preferred
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Growth
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Income
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Detailed explanation-1: -A preferred stock is a class of stock that is granted certain rights that differ from common stock. Namely, preferred stock often possesses higher dividend payments, and a higher claim to assets in the event of liquidation.
Detailed explanation-2: -Preferred shareholders definition can be stated as the owners of stock who have priority on a company’s assets.
Detailed explanation-3: -what claims do preferred stock have in terms of distribution of earning (dividends) and assets? The claims of preferred stockholders are senior to those of the common stockholders with respect to the distribution of both earnings and assets.
Detailed explanation-4: -Similar to common shareholders, those who purchase preferred shares will still be buying shares of ownership in a company.