Preferred Stockholders Have Priority Over Common Stockholders with Respect to Dividends

question 2

True/False

Preferred stockholders have priority over common stockholders with respect to dividends, because dividends must be paid on preferred stock before they can be paid on common stock.However, preferred and common stockholders normally have equal priority with respect to liquidating proceeds in the event of bankruptcy.

---

Definitions:

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product, used to distinguish it from others.

Inter Vivos Gift

A gift given by a living person to another which takes effect during their lifetime.

Intestate Distribution

The process of distributing a deceased person's assets according to state laws when they die without a valid will.

Intellectual Property

Rights arising from creation and innovation in the areas of industry, science, literature, and art.