Which of the Following Would Be Considered a Violation of the Rights

question 385

Multiple Choice

Which of the following would be considered a violation of the rights of one or more classes of a firm's stakeholders?

• A) Common dividends are paid even though preferred dividends are in arrears.
• B) Preferred stockholders are paid before common shareholders in a liquidation.
• C) Common stockholders are able to place members on the board of directors to represent their interests in opposition to the board candidates backed by preferred shareholders.
• D) Common shareholders are able to vote by proxy even when they are unable to attend a shareholders' meeting in person.
• E) Debt is repaid before preferred shareholders are paid anything in a liquidation.

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