Which of the following is usually a right of a preferred stockholder?
A) Right to convert shares to common stock on demand.
B) Preemptive right to participate in the issuance of new common shares.
C) Right to receive dividend payments before any dividends are paid to common stockholders.
D) Right to sue company in bankruptcy proceedings if promised preferred dividends are not paid.

Question

Quizplus · Accepted Answer

Preferred stockholders typically have the right to receive dividend payments before common stockholders. Option A is a right that may or may not be included in the preferred stock agreement. Option B is a common right of common stockholders, not preferred stockholders. Option D is not typically a right of any stockholder.

Which of the Following Is Usually a Right of a Preferred