Question

Hardy lumber has a capital structure that includes bonds, preferred stock, and common stock. which one of the following rights is most apt to be granted to the preferred shareholders?
A) Right to all residual income after the common dividends have been paid.
B) Right to share in company profits prior to other shareholders.
C) Right to elect the corporate directors.
D) Right to a permanent seat on the board of directors.
E) Right to vote on proposed mergers.

Answer 1

The correct answer is B) Right to share in company profits prior to other shareholders