JAMB Economics 2019 Objective — Question 30

Question 30 of 40 from the Joint Admissions and Matriculation Board (JAMB) Economics 2019 Objective paper, with the correct answer and a full explanation.

The type of business finance that entitles the holder to a class of ownership with a higher claim on assets and earnings than common stock is

A. ordinary stock
B. preferred stockCorrect
C. debenture stock
D. common stock

Explanation

A preferred stock is a class of ownership in a corporation with a higher claim on its assets and earnings than common stock. It combines features of debt (fixed dividends) and equity (potential to appreciate in price).

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