Question

Which best describes the difference between preferred and common stocks?preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights.common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends.common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.

Answer 1

The Correct answer is B:

Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.

Answer 2

The correct answer is:

Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.

Explanation:

Common stocks and preferred stocks represent a piece of ownership in a company represented in the stock. While common stocks have voting rights, but their profits depend on the capital gains, and the company can decide wether or not dividends should be paid according to the gains, the value of the stocks can fluctuate according to the market conditions. Preferred stocks have less volatile profits than common stocks, they get their dividends paid before the common stocks and they get regular payments, but do not have voting rights.