The Owner of Preferred Stock

question 195

Multiple Choice

The owner of preferred stock:

• A) Is entitled to a distribution of income prior to the common shareholders.
• B) Has the right to veto the outcome of an election held by the common shareholders.
• C) Has the right to declare the company bankrupt whenever there are insufficient funds to pay dividends to the common shareholders.
• D) Receives tax-free dividends if it is an individual and own more than 20% of the outstanding preferred shares.
• E) Has the right to collect payment on any unpaid dividends as long as the stock is noncumulative preferred.

---

Definitions:

Business Communication

The sharing of information between people within and outside an organization that is performed for the commercial benefit of the organization.

Persuasive Request

A written or verbal communication aimed at convincing someone to agree with a suggestion or idea.

Gain Attention

The act of capturing the focus or interest of an audience or individuals.

Opening

The beginning or initial part of something, such as a presentation, document, or event.