While the preferences given to preferred stock may vary in many situations, the most common preference is
A) they are assured a dividend, usually at a stated rate, before any amount may be distributed to common shareholders.
B) preferred shareholders receive a larger dividend than do common shareholders because they have given up the right to vote.
C) receipt of dividends every time a common stock dividend is declared.
D) the right to convert shares of preferred for shares of common on a basis determined in the preferred stock indenture.

Question

Quizplus · Accepted Answer

Preferred stock typically comes with the preference of receiving dividends before common shareholders, often at a fixed rate. This ensures that preferred shareholders are paid out first from available earnings or during liquidation events.

While the Preferences Given to Preferred Stock May Vary in Many