A Dividend Preference for Preferred Stock Means That

question 160

Multiple Choice

A dividend preference for preferred stock means that:

• A)Preferred stockholders receive their dividends before common shareholders.
• B)Preferred shareholders are guaranteed dividends.
• C)Dividends are paid quarterly.
• D)Preferred stockholders prefer dividends more than common stockholders.
• E)Dividends must be declared on preferred stock.

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Definitions:

Market Price

Market price is the current price at which an asset or service can be bought or sold in the open market.

Total Assets

The sum of all current and non-current assets owned by a business, reflecting the company's overall financial strength on the balance sheet.

Liabilities

Financial obligations or debts that a company owes to others, due to past transactions or events.

Stockholders' Equity

The residual interest in a corporation's assets after deducting liabilities, representing the ownership stake of shareholders.