One of Dolly’s relatives recently passed and the relative left Dolly the option of choosing one of the following items: 1) 100 shares General Electric common stock with a current price of $20 per share and a dividend yield of 3%. 2) 20 shares of General Electric $4 preferred stock (stated value $100). Dolly doesn’t understand the differences between common and preferred stock and needs your help.

Write a memo to Dolly which explains the rights of each stock class. Calculate the yearly dividend payout for both inheritance options.

Answer rating: 100% (QA)

The objective of this memo is to explain the rights of common and preferred stockholders Stockholder... View the full answer