When the articles provide a ____,preferred stock has priority over common stock to the extent the articles state after a corporation is dissolved and when assets are distributed.
A) stock right
B) liquidation preference
C) dividend preference
D) preemptive right

Question

Quizplus · Accepted Answer

The term "liquidation preference" refers to the priority of payment that a holder of preferred stock receives over a holder of common stock in the event of a company's liquidation or dissolution. If a corporation is dissolved and its assets are distributed, holders of preferred stock with a liquidation preference will receive their share of the assets before any money is distributed to holders of common stock. Therefore, B is the correct answer.

When the Articles Provide a ____,Preferred Stock Has Priority Over