Question

Select the statement that is true of common stock. Companies issue dividends to common stockholders before preferred stockholders. Common stockholders do not have a right of first refusal when new stock is issued. Common stock has a stronger claim to a company's assets than preferred stock. Despite having fewer financial protections, common stock typically outperforms preferred stock.

Answer 1

Answer:

Despite having fewer financial protections, common stock typically outperforms preferred stock.

Explanation:

Secondary market can be defined as a market where various investors sell and buy securities from other investors.

Some examples of secondary market around the world are New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE) and National Stock Exchange (NSE).

On the other hand, the primary market refers to the market where these securities that are being sold are issued or created.

A common stock can be defined as a type of security or ownership interest that typically depicts ownership in a corporation. Common stockholders are usually saddled with the responsibility of electing the Board of Directors and voting in corporate policies. Also, it is to be reported on stockholders' equity section of a balance sheet.

The statement that is true of common stock is that, despite having fewer financial protections, common stock typically outperforms preferred stock.