Question

which best describes the difference between preferred and common stocks?
○ preferred stock allows shareholders to vote for a board of directors, while shareholders of common sti have voting rights.
○ common stock gives shareholders one vote per share owned, while shareholders of preferred stock d voting rights.
○ preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock allowed dividends.
○ common stock allows shareholders to get priority for dividends distributed, while shareholders of preferre not allowed dividends.

Explanation:

To determine the correct option, we analyze the characteristics of preferred and common stocks:

• Voting Rights: Common stockholders typically have voting rights (one vote per share), while preferred stockholders usually do not have voting rights. So the first option is incorrect (swaps voting rights), and the second option correctly states this.
• Dividends: Preferred stockholders have priority in dividend distribution (they get dividends before common stockholders, and common stockholders also get dividends, just after preferred). So the third option is incorrect (says common stockholders are not allowed dividends), and the fourth option is incorrect (swaps dividend priority).

Answer:

B. Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. (Assuming the second option is labeled B; adjust the identifier based on actual labeling, but the content about common stock having voting rights per share and preferred lacking voting rights is correct.)