As a preferred stockholder, you are entitled to numerous preferences and privileges over common stockholders. If you are a preferred stockholder of a company that has fallen on economic hardship and is likely to go bankrupt, which preference or privilege of preferred stock is going to be most useful to you?
A) Dividend preference
B) Liquidation preference
C) Conversion privileges
D) Participation privilege

Question

Quizplus · Accepted Answer

If a company fails, its assets are sold and the proceeds are paid to debt holders and stockholders, in that order. Preferred shareholders receive payment in full before common shareholders.

As a Preferred Stockholder, You Are Entitled to Numerous Preferences