Question

Which of the following is true about investors who buy preferred stock?

A) They receive dividends after the common stock shareholders.
B) They are last to get their investment back if the company goes bankrupt.
C) They are nonvoting owners of the company.
D) They cannot trade their stock on the secondary market.

Answer 1

The answer above is actually INCORRECT. The correct answer should be They are nonvoting owners of the company.

Answer 2

I think the correct answer is A. Investors who buy preferred stock receive dividends after the common stock shareholders. Preferred stock is a stock type that gives right to the owner a fixed share of the company's profit or fixed dividend.