If a corporation has both common and preferred stock, the preferred stockholders will receive their dividends first, if the money is available.

Question

Quizplus · Accepted Answer

Preferred stockholders have priority over common stockholders in receiving dividends, if the corporation has both types of stock. However, if the corporation does not have enough funds to pay dividends to both preferred and common stockholders, preferred stockholders may receive partial or no dividend while common stockholders may receive nothing at all.

If a Corporation Has Both Common and Preferred Stock, the Preferred