Compare common and preferred shares: test your skills
Common shares usually vote and share in growth; preferred shares usually pay set dividends and get paid first. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Compare common and preferred shares
- Know what “cumulative” and “callable” mean
- Understand the growth-versus-priority trade-off
- Practice
1. Who is usually paid first?
- Practice
2. Which usually has voting rights?
- Practice
3. “Cumulative” preferred means…
- Key idea
4. Which statement best explains "Growth versus priority"?
- Key idea
5. Which statement best explains "Votes usually go with common"?
- Key idea
6. Which statement best explains "Terms differ by issue"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
A preferred share with a $50 par value pays a 6% dividend. What is the yearly dividend?
Show the answer
$3.00
$50 × 0.06 = $3.00 a year.
Write one sentence explaining the main trade-off between common and preferred shares.
More tests in this bootcamp
- What is a stock? Understand ownership and risk
- Compare common and preferred shares
- Follow a stock trade from quote to exchange
- Measure company size with market capitalization
- Read dividend yield without mistaking it for a promise
- Decode the P/E ratio: price compared with profit
- Understand growth and value investing styles
- Follow an IPO from offer price to public trading
- Tell a stock split from share dilution
- Understand market rises, falls and recovery math
- Final exam: Stocks and the market