Question

Protected preferred stock:

a. prohibits the issuance of any other stock by the company.
b. gives priority over all creditors in the event of dissolution.
c. provides for a fund to protect the dividend.
d. participates in the common stock dividends.

Answer 1

Final answer:

Protected preferred stock provides for a fund to protect the dividend. Option C

Step-by-step explanation:

Protected preferred stock refers to a type of stock that provides certain privileges and protections to the shareholders. In this case, option C is correct: protected preferred stock provides for a fund to protect the dividend.

This means that if the company is unable to pay the full dividend to all shareholders, the protected preferred stockholders will receive their dividends before any other shareholders. This helps to ensure a consistent income stream for the preferred stockholders. option C