Preferred stockholders generally:
A) have full voting rights.
B) receive a fixed dividend.
C) have priority over debt holders if the company goes bankrupt.
D) convert to bond holders.

Question

Quizplus · Accepted Answer

Preferred stockholders receive a fixed dividend, which means they are paid a set amount of money regardless of the company's financial performance. They do not generally have full voting rights, although some may have limited voting rights on certain matters. Preferred stockholders also do not have priority over debt holders in the event of bankruptcy, as debt holders are considered creditors and have a higher position in the payment hierarchy. Preferred stockholders do not convert to bond holders; they remain as preferred stockholders unless they choose to sell their shares.

Preferred Stockholders Generally