Which of the following statements is TRUE regarding the valuations of preferred stock and common stock?

• Since a share of preferred stock typically has no maturity and pays a fixed periodic dividend (preferred dividend), we usually value preferred stock as a perpetuity with a fixed (zero-growth) cash flow that occurs each period.

• Common stocks are typically valued as ordinary annuities.

• From the investor's point of view, the preferred stock of a corporation is considered a more risky investment than the common stock of the same corporation.

• The dividend of a corporations preferred stock must be higher than the dividend of the same corporations common stock.

• Both A and C are correct