Which one of the following statements concerning preferred shares is INCORRECT?
A) Preferred shares have the right to receive dividends or assets before common shares
B) Preferred shares have limited voting rights as common shares
C) Preferred shares have first claims on assets, once all debtors are repaid
D) Preferred shareholders have only residual claims on the firm's assets

Question

Quizplus · Accepted Answer

Preferred shareholders have priority over common shareholders in terms of dividend payments and asset distribution, and they also have limited voting rights. However, they do not have only residual claims on the firm's assets. This statement is incorrect.

Which One of the Following Statements Concerning Preferred Shares Is