Owners have higher priority than common stockholders and usually get paid dividends. Which type of stock is this?

Owners have higher priority than common stockholders and usually get paid dividends. Which type of stock is this?

• A. Preferred Stock
• B. Common Stock
• C. Ticker Symbol
• D. EPS

Answer: (A)

The concept is that some stock classes have priority over others for dividend payments. This description fits preferred stock. Preferred stockholders have a higher claim on dividends than common stockholders, and the dividends are usually fixed and paid before any dividends to common shareholders. In liquidation, they also have a higher priority on assets than common stock, though not as high as debt. Common stock represents ownership with voting rights and typically variable, non-guaranteed dividends paid after preferreds. The other terms aren’t stock types: a ticker symbol is the trading code for a security, and EPS is a profitability metric per share.

The concept is that some stock classes have priority over others for dividend payments. This description fits preferred stock. Preferred stockholders have a higher claim on dividends than common stockholders, and the dividends are usually fixed and paid before any dividends to common shareholders. In liquidation, they also have a higher priority on assets than common stock, though not as high as debt. Common stock represents ownership with voting rights and typically variable, non-guaranteed dividends paid after preferreds. The other terms aren’t stock types: a ticker symbol is the trading code for a security, and EPS is a profitability metric per share.