As an investor, would you prefer buying bonds or preferred stock? Why? Solution As an investor i would prefer buying bonds Generally, preferred stocks are rated two notches below bonds with regards to risk to account for the lower claim on assets of the company. Bondholders enjoy a right to receive interest payments that is superior to a preferred shareholder\'s right to receive dividend If a company goes bankrupt bondholders do get repaid before stockholders..

1. As an investor, would you prefer buying bonds or preferred stock? Why?
Solution
As an investor i would prefer buying bonds
Generally, preferred stocks are rated two notches below bonds with regards to risk to account for
the lower claim on assets of the company.
Bondholders enjoy a right to receive interest payments that is superior to a preferred
shareholder's right to receive dividend
If a company goes bankrupt bondholders do get repaid before stockholders.