Preferred shareholders:
A)are guaranteed that they will not take a loss on their investment.
B)have higher voting rights than common shareholders.
C)are sold for a price lower than that of common stock.
D)have the first claim on dividend funds.

Question

Quizplus · Accepted Answer

Preferred shareholders have the first claim on dividend funds, meaning that they receive their dividend payment before common shareholders. However, they are not guaranteed that they will not take a loss on their investment, do not necessarily have higher voting rights than common shareholders, and they may be sold for a higher or lower price than common stock, depending on the specific circumstances.

Preferred Shareholders