Series 6 - Investment Company And Variable Contracts Products Representative Exam

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Which of the following choices would be suitable for an investor who wants a fixed dividend that is also safer than straight preferred stock?

Noncumulative preferred
A
Cumulative preferred
B
Adjustable-rate preferred
C
Callable preferred
D

Explanations

Companies that issue cumulative preferred stock are required to pay any dividends in arrears to preferred stockholders before paying a straight preferred dividend or common dividend. This makes it safer that straight preferred (noncumulative) stock.

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