Preferred stockholders are the first to receive extra dividends resulting from higher than expected profits.

Question

Quizplus · Accepted Answer

Preferred stockholders have a priority over common stockholders in receiving dividends, but these dividends are typically fixed and not related to extra profits. Extra or special dividends resulting from higher than expected profits are usually at the discretion of the board and can be distributed to both common and preferred shareholders, with common shareholders often benefiting from such distributions.

Preferred Stockholders Are the First to Receive Extra Dividends Resulting