Which one of the following types of stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings? A A) Dual class B B) Cumulative C C) Non-cumulative D D) Preferred E E) Common

Question

Social Studies

Cristopher Li

14 May, 19:44

Which one of the following types of stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings? A A) Dual class B B) Cumulative C C) Non-cumulative D D) Preferred E E) Common

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Answers (1)

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Leah Rasmussen · Answer 1

Preferred stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings.

Option: (D)

Explanation:

Preferred stock is known as the ownership share in a public company having both the equity and income fixed character. It takes more preference or the priority than the ones that are ordinary share dividends. It is generally considered same as the hybrid tool as it possesses the both characteristic of equity and constant income. They pay usually a stable dividend but have no right to vote as other shareholders. The preferred stock is highly sensitive with the interest rates changes in the market.