Question

Mark was trying to decide between purchasing the common stock shares of montgomery manufacturing, or preferred shares of the same company. as a student of business, you provide the following accurate information that ________

Answer 1

The statement that would best complete the sentence would be "preferred shareholders typically do not have voting rights. Companies are obligated to pay preferred shareholders their dividends before paying dividends to common stockholders." The concept is essential in purchasing stocks.

Answer 2

Explanation:

The preferred share has priority in the receipt of dividends, however, it does not have the right to vote at the meeting. On the other hand, common shares are entitled to vote at a meeting, but have no priority in the payment of dividends. You need to evaluate the company and the assets you will invest, its liquidity, profitability, corporate governance to make a safe decision.