Preferred stockholders
A) do not have preference over common stockholders in the case of liquidation.
B) do have preference over bondholders in the case of liquidation.
C) do not have preference over bondholders in the case of liquidation.
D) Two of the above are true statements.

Question

Quizplus · Accepted Answer

Preferred stockholders do not have preference over bondholders in the case of liquidation. However, they do have preference over common stockholders. Therefore, option B is incorrect. Option A is also incorrect as it states that preferred stockholders do not have preference over common stockholders in the case of liquidation, which is not true.

Preferred Stockholders