Which of the following statements is NOT true?
A) The legal capital of a corporation represents an amount that cannot be returned to the owners while the corporation still exists.
B) Investors in a corporation are called stockholders.
C) The right to receive a dividend is one of the basic rights of preferred stockholders.
D) Compared with preferred stock, common stock usually has a favorable preference in terms of dividends.

Question

Quizplus · Accepted Answer

This statement is false because compared with preferred stock, common stock usually has a lower preference or no preference in terms of dividends. Preferred stockholders have a priority claim on dividends over common stockholders.

Which of the Following Statements Is NOT True