Series 6 - Investment Company And Variable Contracts Products Representative Exam

Preview Mode

Which of the following statements about preferred stock are true?

It is an equity security. It pays fixed dividends
A
It is an equity security. All corporations issue preferred stock
B
It pays fixed dividends. Preferred stockholders are not paid dividends
C
All corporations issue preferred stock
D

Explanations

Preferred stock is an equity security. Preferred stock pays FIXED (not variable) dividends, where the common stock may not pay any dividends at all - or if any, it will be variable. All corporations do not issue preferred stock.