At Westonci.ca, we provide reliable answers to your questions from a community of experts. Start exploring today! Get accurate and detailed answers to your questions from a dedicated community of experts on our Q&A platform. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

9. An important difference between common stock and preferred stock is that the price of the common stock tends to be more than that of preferred stock. a) volatile b) stable c) expensive​

Sagot :

Answer:

The correct answer is B. Stable.

Explanation:

Preference share is a share which, in the event of a dividend and liquidation, has a preferential right over other shares, for example ordinary shares. The more favorable position of the preference share is usually reflected in a higher market price than for the ordinary share, all other things being equal. Preference shares with a high guaranteed dividend are partly given the character of a corporate bond. A fundamental difference, however, is that the company's creditors take precedence over all shareholders, including holders of preference shares, in the event that the company develops payment difficulties. At the same time as the preference share gives priority to dividends, they generally give significantly less voting rights than the ordinary share.