When a Company Has Both Preferred Stock and Common Stock

question 48

Multiple Choice

When a company has both preferred stock and common stock:

• A)the common shareholders receive dividends before the preferred shareholders.
• B)no particular order needs to be followed for the payment of dividends.
• C)the preferred stockholders receive their dividends before the common shareholders.
• D)the preferred stockholders receive their dividends before the common shareholders only if the preferred stock is cumulative.