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.

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Unit 1 Unit 2 Unit 3 Unit 4

Which of the following statements about preferred stock are true?

It is an equity security. It pays fixed dividends

It is an equity security. All corporations issue preferred stock

It pays fixed dividends. Preferred stockholders are not paid dividends

All corporations issue preferred stock