Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Name: Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.
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Question

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This is one of the features of preferred stock - they have a priority claim on dividends over common stockholders. Once preferred stockholders receive their dividends for the current year, then the common stockholders can receive theirs.

Preferred Stockholders Must Receive Their Current-Year Dividends Before the Common