Question

Preferred stockholders have priority over common stockholders with respect to dividends, because dividends must be paid on preferred stock before they can be paid on common stock. However, preferred and common stockholders normally have equal priority with respect to liquidating proceeds in the event of bankruptcy.A. TrueB. False

Answer 1

Answer:

B. False

Explanation:

Preference Shareholders are entitled to receive their return on capital before the ordinary shareholders when when a company is wound - up or liquidated.