Which of the following statements is NOT true about preferred stock?
A) Preferred stock represents ownership in the firm.
B) Preferred stockholders are not guaranteed dividend payments by the firm.
C) Preferred stock dividends are paid by the issuer with after-tax dollars.
D) Preferred stock holders have limited voting privileges relative to common-stock owners.

Question

Quizplus · Accepted Answer

Preferred stockholders typically have a fixed dividend that, while not legally guaranteed, is expected to be paid before any dividends are paid to common stockholders. If dividends are skipped, they often accumulate and must be paid out before common dividends can resume.

Which of the Following Statements Is NOT True About Preferred