In the event a corporation is dissolved,common stockholders receive preference over preferred stockholders in the distribution of assets.

Question

Quizplus · Accepted Answer

Preferred stockholders have priority over common stockholders in the distribution of assets in the event of a corporation's dissolution. This is because preferred stock represents a fixed claim on the corporation's assets and generally carries a higher dividend rate than common stock.

In the Event a Corporation Is Dissolved,common Stockholders Receive Preference