Which of the following would be considered a violation of the rights of one or more classes of a firm's stakeholders?
A) Common dividends are paid even though preferred dividends are in arrears.
B) Preferred stockholders are paid before common shareholders in a liquidation.
C) Common stockholders are able to place members on the board of directors to represent their interests in opposition to the board candidates backed by preferred shareholders.
D) Common shareholders are able to vote by proxy even when they are unable to attend a shareholders' meeting in person.
E) Debt is repaid before preferred shareholders are paid anything in a liquidation.
Correct Answer:
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