suppose a company has a preferred stock issue and a common stock issue. both have just paid a $2 dividend. which do you think will have a higher price: a share of the preferred or a share of the common?

Respuesta :

There are two main ways that common stocks differ from preferred stocks. First, common stocks do not pay a fixed dividend like preferred stocks do. Second, whereas preferred stocks do not have voting rights, common stocks do.

The price per share is the discounted present value of future dividends for both common and preferred stocks.

What are the two main distinctions between preferred stock and common stock?

The primary distinction between preferred stock and common stock is that common stock grants shareholders voting rights, whereas preferred stock does not. Preferred shareholders receive dividends first because they have priority over a company's income.

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