Question

Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, he has the right to be involved in the election of its directors, who are responsible for managing the company and achieving the company’s objectives. True or False: Larry will receive dividends together with preferred stockholders.

Answer 1

Answer:

False

Explanation:

Preferred shares is a type of equity that sits between coomn shares and bonds. Preferred share holder's don't have any voting rights in the company. They are paid dividends before the common share holder's.

Common share holders have the right to be involved in the election of its directors, who are responsible for managing the company and achieving the company’s objectives. They are usually paid dividends last.

Even on liquidation of the business preference share holders are paid first before common share holders.