Preferred stockholders ________.

Question

Quizplus · Accepted Answer

Preferred stockholders receive a special dividend preference over common stockholders, meaning they get paid before the common stockholders receive their dividends. This is one of the primary benefits of holding preferred stock. Choice B is incorrect because there is no guarantee that a preferred stockholder will not have a loss on their investment. Choice C is incorrect because, unlike common stockholders, preferred stockholders typically do not have voting rights. Choice D is incorrect because preferred stockholders generally have less investment risk compared to common stockholders as they have a higher claim on assets and earnings in case of bankruptcy or liquidation.

Preferred Stockholders ________