Which statement is FALSE?
A)Preferred stockholders receive dividends before the common stockholders only if the preferred stock is cumulative.
B)Preferred stockholders receive dividends before the common stockholders.
C)Preferred stockholders receive assets before the common stockholders if the corporation liquidates.
D)Preferred stockholders have the same basic four rights as common stockholders,unless a right is taken away.

Question

Quizplus · Accepted Answer

This statement is false because preferred stockholders receive dividends before the common stockholders regardless of whether the preferred stock is cumulative or non-cumulative. If the preferred stock is cumulative, any missed dividends must be paid before common stockholders receive any dividends.

Which Statement Is FALSE