Answer :
The following is not true about common stock and common stock valuation Cumulative desire stocks (cumulative desired inventory) must receive any dividends in arrears earlier than the corporation may also pay any dividends to not unusual place shareholders.
The important downside of proudly owning desire stocks is that the buyers in those cars do not experience the equal vote casting rights as not unusual place common stock. This approach that the business enterprise isn't beholden to desired shareholders the manner it's miles to conventional fairness shareholders.
Preferred inventory is typically taken into consideration much less unstable than not unusualplace inventory however generally has much less capability for profit. Preferred stockholders typically do now no longer have vote casting rights, as not unusualplace stockholders do, however they've a extra declare to the business enterprise's assets.
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