Question

Preferred stock typically does not have the right to payment of dividends on the dissolution of the corporation.

a. True
b. False

Answer 1

Preferred stock typically does not have the right to payment of dividends on the dissolution of the corporation.

Step-by-step explanation:

False Preferred stock typically does not have the right to payment of dividends on the dissolution of the corporation. However, preferred stockholders usually have a higher claim on the assets and earnings of a corporation compared to common stockholders. They also often have a fixed dividend rate, which means they are entitled to receive a specific amount of dividend before any dividends are paid to common stockholders.