Preferred Stock Example – Preferred Stock Dividend

Preferred stock dividend example problem will discuss the process for determining the amount of a dividend to be paid to the preferred stock holders as compared to the common stock holders. Preferred stock holder get paid before common stock holders but have a limit to the amount they will receive. In a corporation the board of directors can determine the amount of dividend to give but has less control over how it will be distributed. Any dividend decided on will generally need to be paid first to the preferred stock holders before going to the common stock holder. The preferred stock holder typically to not have voting writes in the company.
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