Preferred stock represents a special type of ownership interest in the firm and, thus, the preferred stockholders must receive their stated dividends prior to the distribution of any earnings to common stockholders and bondholders.

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The Answer of Preferred stock represents a special type of ownership interest in the firm and, thus, the preferred stockholders must receive their stated dividends prior to the distribution of any earnings to common stockholders and bondholders.

Preferred Stock Represents a Special Type of Ownership Interest in the Firm