Homework Help Forum: investing 3-2

Posted by Johnny on Sunday, February 22, 2009 at 12:03am.

Which of the following preferred stock properties would provide the best argument favoring purchase of preferred stock by an investor? A. When long-term bond yields decline, the value of preferred stock can potentially rise. B. Because preferred stock trading volume is lower than common stock trading volume, preferred stock prices are less volatile than common stock prices. C. The yield differential between preferred stock and bonds is smaller than would be expected on the basis of risk differentials. D. Preferred stockholders receive preferential treatment over lower-class, common stockholders when the corporation earns sufficient profit to pay creditors and shareholders. I would think it's D, but not sure

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