Investors who acquire preferred stock Investors who acquire preferred stock.
A preferred stock is an hybrid of a stock and a bond. It is a stock in which the holders of the stock have no voting rights. Also, when dividends are being paid, preferred shareholders are paid before common shareholders. Creditors have preference over preferred shareholders.
Advantages of preferred stock
- Preferred stock investors usually receive a higher dividend compared with common shareholders.
- In the event of the liquidation of the business, preferred stock holders have a higher claim on an asset compared to common shareholders.
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Answer:
E. He is not accounting for the new consumers who will benefit from being able to consume the product.
Explanation:
With the increase in price of product, Demand equals Supply i.e., no shortage exists in the market. Thus, the equilibrium level is achieved at price of $ 10. Further, The most important advantage of increasing the price in the given question is that shortage which exists earlier no longer remains now which will benefit all the consumers including some new consumers as they will able to get the sufficient number of quantities of product for the consumption now. Financial Head of Firm is ignoring the new consumers who will benefit from able to consume the product.
Therefore, He is not accounting for the new consumers who will benefit from able to consume the product.
