Which of the following is NOT a characteristic of preferred stock?

Preferred stock is typically known for certain characteristics that distinguish it from common stock. One key feature of preferred stock is that it provides fixed dividends, which means that holders of preferred shares receive dividends at a predetermined rate, usually before any dividends are paid to common stockholders. This fixed income nature of preferred stock makes it appealing to investors seeking stable returns.

Additionally, in the event of liquidation, preferred stockholders have priority over common stockholders when it comes to asset distribution. This means that if a company goes bankrupt, preferred shareholders will be paid out before any common shareholders receive anything, adding an extra layer of security for preferred stock investors.

Another characteristic of preferred stock is that it is generally less volatile than common stock. This is because preferred stocks behave more like bonds, providing fixed income and thus being less sensitive to the fluctuations in the market compared to common shares, which can experience significant price volatility based on company performance and market conditions.

In contrast, the statement regarding voting rights is typically incorrect for preferred stock. Preferred stockholders usually do not have voting rights in the company. This lack of voting power distinguishes preferred stock from common stock, which does allow shareholders to vote on important issues such as electing the board of directors or approving mergers and acquisitions. Therefore,