Asked by Tracia Harrison on Jun 17, 2024
Verified
Which of the following is not a right or preference associated with preferred stock?
A) The right to vote
B) First claim to dividends
C) Preference to corporate assets in case of liquidation
D) To receive dividends in arrears before common stockholders receive dividends
Preferred Stock
A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often receiving dividends before common shareholders.
Right To Vote
The entitlement to participate in making a decision by casting a vote, commonly seen in democratic processes and corporate settings.
Dividends In Arrears
Unpaid dividends on cumulative preferred stock that must be paid out before dividends can be issued to common shareholders.
- Distinguish between common and preferred stock in terms of rights and characteristics.
Verified Answer
TW
Tiffany WarrenJun 24, 2024
Final Answer :
A
Explanation :
While common stockholders have the right to vote, preferred stockholders do not typically have this right.
Learning Objectives
- Distinguish between common and preferred stock in terms of rights and characteristics.