Chapter 10, Problem 10.2S

(Learning Objective 1: Describe characteristics of preferred and common stock) Answer the following questions about the characteristics of a corporation’s stock:

1. 1. Who are the real owners of a corporation?
2. 2. What privileges do preferred stockholders have over common stockholders?
3. 3. Which class of stockholders reaps greater benefits from a highly profitable corporation? Explain your answer.