Question

Preferred stock is called preferred because it usually has two preferences over common stock. These preferences relate to: A. Payment of dividends and voting rights. B. Higher par value and payment of dividends. C. Distribution of assets if the corporation is dissolved and higher par value. D. Distribution of assets if the corporation is dissolved and payment of dividends.

Answer 1

Answer:

D. Distribution of assets if the corporation is dissolved and payment of dividends.

Explanation:

Preferred stock is a form of shares that represents ownership in an organization and has major claims over common stocks on the organization's assets and earnings. When it comes to payments of dividends holders of preferred stock are placed and held high over holders of common stock. In general, preferred stock comes with special priorities that gives senior investor preferred status over common shareholders.