SIE practice questionmediumPreferred Stock
Which of the following is true for all types of preferred stock?
- APreferred stock can always be converted to common stock.
- BPreferred stockholders always have voting rights.
- CPreferred dividends never change.
- DPreferred stock has priority over common stock for dividend payments.✓ Correct answer
Explanation
Why D — Preferred stock has priority over common stock for dividend payments.
Preferred stockholders are paid before common stockholders. Voting rights and convertibility are not universal features, and dividends can be suspended.
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