Which of the following statements is true?
A) Preferred stockholders are considered to be the true owners of public corporations.
B) Dividends paid to preferred stockholders are not fixed.
C) Preferred stockholders usually do not have voting rights.
D) Preferred stock can never be converted to common stock.

Question

Quizplus · Accepted Answer

Preferred stockholders usually do not have voting rights, unlike common stockholders who are typically given voting rights in corporate decisions. Option A is incorrect because common stockholders are considered the true owners of public corporations, while preferred stockholders have limited ownership rights. Option B is incorrect because dividends paid to preferred stockholders are typically fixed or determined by a predetermined rate or amount, unlike dividends paid to common stockholders which can vary. Option D is incorrect because preferred stock can sometimes be converted to common stock through a process known as convertible preferred stock.

Which of the Following Statements Is True