Which of the following statements is true regarding common shares compared to preferred shares?

Question: Which of the following statements is true regarding common shares compared to preferred shares?

Answer options: ✅ Common shares typically carry voting rights, while preferred shares generally do not.

• Preferred shares offer greater potential for capital appreciation than common shares.
• Dividends on common shares are usually fixed, whereas preferred share dividends are variable.
• In a liquidation, preferred shareholders are paid after common shareholders.

Correct answer: Common shares typically carry voting rights, while preferred shares generally do not.

Explanation: Common shareholders have voting rights and stand to gain from capital appreciation, while preferred shareholders typically have no voting rights and receive fixed dividends.