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Which of the following is not a feature associated with an investment in preferred stock?
Suggested Answer: D
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The false statement regarding both a UGMA and a UTMA is that the assets must be re-registered in the minor child's name when the child turns 18. The rule differs between the two types of accounts. The UGMA requires that the assets must be re-registered when the child reaches the ''age of majority,'' as defined by the state, and the definition differs among states. Under the UTMA, the transfer of the account can be delayed until the minor child has reached the age of 25.
32 comments · newest first
LA
Lazaro
11 months ago
I'm not sure about the voting rights part, sounds off.
LE
Lenora
11 months ago
Skipped dividends must be made up, that's true!
MA
Marvel
12 months ago
Wait, do preferred shareholders really not vote?
JU
Justine
12 months ago
Totally agree, that's a key feature!
ST
Stephane
1 year ago
Preferred stock dividends are usually fixed.
MI
Michal
1 year ago
The convertibility to common stock sounds familiar, but I can't recall if that's a standard feature for all preferred stocks.
SA
Sang
1 year ago
I practiced a question similar to this, and I think preferred shareholders don’t typically vote like common shareholders do.
AL
Alesia
1 year ago
I think skipping dividends is a big deal for preferred stock, but I'm not sure about the voting rights.
CH
Chantell
1 year ago
I remember that preferred stock usually has fixed dividends, so that part seems right.
LY
Lynelle
1 year ago
Ah, I think I've got it. The fact that preferred stock may be convertible to common stock is not a universal feature. That's the one that stands out as different from the other characteristics listed. I'll mark that as my answer.
PO
Portia
1 year ago
I'm a bit confused on this one. I know the basics of preferred stock, but I'm not sure I can confidently identify the feature that's not typical. I'll have to review my notes and try to reason through the options.
TO
Tom
1 year ago
Okay, let's see. I know preferred stock dividends are usually fixed, and if a dividend is skipped, it has to be made up before common shareholders get paid. The voting rights for preferred shareholders are also a key feature. I'm not sure about the convertibility, though - I'll have to think that one through.
TE
Tegan
1 year ago
Hmm, this is a tricky one. I'll need to think carefully about the features of preferred stock to determine which one is not a typical characteristic.
DU
Dusti
1 year ago
I'm pretty confident I know the answer to this. Preferred shareholders typically don't have voting rights on board members, mergers, and shareholder proposals. That's the feature that's not associated with preferred stock investments.
BA
Basilia
2 years ago
This question is making me prefer to not take this exam. Maybe I'll just stick to investing in 'common' sense instead.
LU
Lucia
1 year ago
C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.
AH
Ahmed
1 year ago
B) If a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.
FA
Fabiola
1 year ago
A) The dividend is typically a fixed amount.
EL
Elmira
2 years ago
I thought preferred stock was the one where you get to wear a fancy hat. Guess I've been investing in the wrong kind of 'preferred' stock.
TE
Terrilyn
1 year ago
D) The preferred stock may be convertible to common stock.
ED
Edna
1 year ago
C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.
ST
Staci
1 year ago
B) If a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.
DI
Dierdre
1 year ago
A) The dividend is typically a fixed amount.
IZ
Izetta
2 years ago
A, the dividend being fixed, is not a feature of preferred stock. This exam is really testing our knowledge of finance.
EL
Eleni
2 years ago
D is the correct answer. The ability to convert to common stock is a key feature of preferred stock.
KA
Kallie
2 years ago
I'm going with B. If a dividend payment is skipped, it does not have to be made up before common shareholders can receive dividends.
FE
Felicidad
1 year ago
User 2: I agree with you, C seems like the right choice.
SH
Sharita
1 year ago
User 1: I think C is the correct answer. Preferred shareholders usually have the right to vote on important matters.
LA
Larae
2 years ago
D) The preferred stock may be convertible to common stock.
VA
Vanna
2 years ago
I think the answer is C. Preferred shareholders usually don't have voting rights, that's a common feature of preferred stock.
FA
Fatima
2 years ago
A) The dividend is typically a fixed amount.
AV
Avery
2 years ago
C) Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.