Posted by Johnny on .
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