Common stockholders receive dividends even if the total dividend is not large enough to pay the preferred stockholders first.

Question

Quizplus · Accepted Answer

Preferred stockholders have priority over common stockholders when it comes to dividend payments, meaning they are paid dividends before any dividends are distributed to common stockholders. If the total dividend is not large enough to cover the preferred stockholders, common stockholders will not receive dividends.

Common Stockholders Receive Dividends Even If the Total Dividend Is