Preferred stock dividends ________ earnings available to common stockholders.
A) increase
B) decrease
C) do not effect
D) There is not enough information to determine.

Question

Quizplus · Accepted Answer

Preferred stock dividends decrease earnings available to common stockholders because they are paid out of the company's earnings before any dividends can be distributed to common stockholders.

Preferred Stock Dividends ________ Earnings Available to Common Stockholders