savagedaboss2017
Answered

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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 :

francocanacari

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.

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