Which of the following does not correctly describe preferred stock?
A)Preferred stock has a dividend preference relative to common stock.
B)Preferred stockholders are guaranteed to receive dividends.
C)Preferred stock does not grant voting rights.
D)Preferred stockholders receive dividends in arrears only if the shares are cumulative.

Question

Quizplus · Accepted Answer

Preferred stockholders are not guaranteed to receive dividends, as the payment of dividends is at the discretion of the company's board of directors.

Which of the Following Does Not Correctly Describe Preferred Stock