What is the significance of the term "preferred" in reference to preferred stock?
A) Preferred stockholders receive preference over creditors of the corporation in the event of
liquidation.
B) Preferred stockholders receive certain preferences over common stockholders with respect
to dividends or with respect to assets in the event of liquidation.
C) It is viewed to generally be a better investment than common stock.
D) Only shareholders owning a certain minimum amount of common stock are entitled to
purchase preferred stock.
E) Preferred stockholders usually have better voting rights than common stockholders.
B
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