Preferred shareholders are not guaranteed any dividend payments and have the lowest-priority claim on the firm's assets in the event of bankruptcy.

Question

Quizplus · Accepted Answer

Preferred shareholders have a higher priority claim on the firm's assets than common shareholders in the event of bankruptcy, but still have a lower priority than bondholders and other creditors. They also have a fixed dividend payment that must be paid before common shareholders can receive any dividend.

Preferred Shareholders Are Not Guaranteed Any Dividend Payments and Have