Hardy Lumber has a capital structure which includes bonds,preferred stock,and common stock. Which of the following rights have most likely been granted to the preferred shareholders?
I.right to share in company profits prior to other shareholders
II.right to elect the corporate directors
III.right to vote on proposed mergers
IV.right to all residual income after the common dividends have been paid
A)I only
B)I and III only
C)I and IV only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

Preferred shareholders typically have the right to receive a fixed dividend prior to common shareholders, but they do not typically have the right to elect directors or vote on mergers. Additionally, preferred shareholders may have certain liquidation preferences, but they do not typically have the right to residual income.

Hardy Lumber Has a Capital Structure Which Includes Bonds,preferred Stock,and