Which of the Following Are the Typical Rights Afforded to Preferred

question 33

Multiple Choice

Which of the following are the typical rights afforded to preferred shareholders?

• A) A preferential right to receive dividend and a preference to receive the liquidation value of assets over common stock holders.
• B) A preference to receive dividends when declared by the board of directors after common shareholders receive their dividends.
• C) A preference to receive the liquidation value of the assets as stated in the share contract after common shareholders receive their share.
• D) The right to vote on major corporate issues including electing the board of directors.

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Definitions:

Ethical Conduct

Behavior that is consistent with principles of moral and ethical standards, which guide decision-making and actions.

External User

External User refers to individuals or entities outside of a company who use its financial statements to make decisions, such as investors, creditors, and regulatory agencies.

Federal Government

The national government of a federated state, which holds the authority to govern the issues that affect the entire country.

Financial Accounting Standards Board

An independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.