Which of the following is a characteristic of preferred stock?

Preferred stock is characterized by fixed dividend payments. This means that shareholders of preferred stock are entitled to receive a specified dividend amount before any dividends are paid to common stockholders. This fixed nature of the dividend provides a more predictable income stream for investors, making preferred stock similar to debt securities. Unlike common stock, which can have variable dividends based on company profits and board decisions, preferred dividends are typically established at the time of issuance and remain constant until potentially unpaid or in default.

This characteristic makes preferred stock an attractive option for investors looking for stable income, particularly in comparison to the more volatile nature of common stock, which does not guarantee dividends and is subject to fluctuations in market conditions.