Before a liquidating company can distribute any assets to common stockholders,it must pay the full liquidating value of the preferred stock to all preferred stockholders.

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This statement is true. Preferred stock usually has a liquidation preference that entitles these stockholders to receive a fixed amount or a percentage of the par value of their shares if the company liquidates. Before any assets can be distributed to common stockholders, the company must pay the full liquidating value of the preferred stock to all preferred stockholders.

Before a Liquidating Company Can Distribute Any Assets to Common