Common stock dividends are __________ by preferred stock dividends.

Question

Quizplus · Accepted Answer

Preferred stock dividends have priority over common stock dividends, meaning that if the company has limited funds for dividends, preferred stock dividends will be paid first. As a result, common stock dividends may be decreased or eliminated if there is not enough funds left after paying preferred stock dividends. Therefore, common stock dividends are decreased by preferred stock dividends.

Common Stock Dividends Are __________ by Preferred Stock Dividends