Question

What is true about preferred stocks?

1.they do not pay dividends
2.they give owners a share of ownership in the company
3.they are all risk-free
4.all of above.

Answer 1

2. they give owners a share of ownership in the company.
Even though they still have to pay dividends, the preferred stock is payed before the common stock, and even though preferred stock is top priority, there are still risks, because they do not pay out missed dividends.