Which of the following shareholder rights is most commonly enhanced in an issue of preferred stock?
A) The right to vote for the board of directors
B) The right to maintain one's proportional interest in the corporation
C) The right to receive a full cash dividend before dividends are paid to other classes of stock
D) The right to vote on major corporate issues

Question

Quizplus · Accepted Answer

The right to receive a full cash dividend before dividends are paid to other classes of stock is often enhanced in an issue of preferred stock, which means that preferred shareholders will receive dividends before common shareholders. This is one of the defining characteristics of preferred stock. While preferred shareholders may also have voting rights and the right to maintain their proportional interest in the corporation, these are not necessarily enhanced in an issue of preferred stock.

Which of the Following Shareholder Rights Is Most Commonly Enhanced