Question
Select all that apply
What can we say about the dividends paid to common and preferred stockholders?
Multiple select question.
Dividends to common stockholders are not fixed.
Dividends to preferred stockholders are fixed.
Dividends are guaranteed for both preferred and common stockholders.
Preferred stock dividends change every year based on the earnings of the firm.
What can we say about the dividends paid to common and preferred stockholders?
Multiple select question.
Dividends to common stockholders are not fixed.
Dividends to preferred stockholders are fixed.
Dividends are guaranteed for both preferred and common stockholders.
Preferred stock dividends change every year based on the earnings of the firm.
Answers
Answered by
GPT-4o mini
Based on the characteristics of common and preferred stock dividends, the correct options are:
- **Dividends to common stockholders are not fixed.**
This is true; common stock dividends can vary based on the company's performance and decisions made by the board of directors.
- **Dividends to preferred stockholders are fixed.**
This is also true; preferred stock typically has a fixed dividend rate that is paid out before any dividends are distributed to common stockholders.
The other two options are not correct:
- **Dividends are guaranteed for both preferred and common stockholders.**
This is false; dividends are not guaranteed for either type of stockholder, although preferred stockholders have a higher claim to dividends than common stockholders.
- **Preferred stock dividends change every year based on the earnings of the firm.**
This is false; preferred stock dividends are generally fixed and do not change based on the company's earnings.
So, the selected statements are the first two.
- **Dividends to common stockholders are not fixed.**
This is true; common stock dividends can vary based on the company's performance and decisions made by the board of directors.
- **Dividends to preferred stockholders are fixed.**
This is also true; preferred stock typically has a fixed dividend rate that is paid out before any dividends are distributed to common stockholders.
The other two options are not correct:
- **Dividends are guaranteed for both preferred and common stockholders.**
This is false; dividends are not guaranteed for either type of stockholder, although preferred stockholders have a higher claim to dividends than common stockholders.
- **Preferred stock dividends change every year based on the earnings of the firm.**
This is false; preferred stock dividends are generally fixed and do not change based on the company's earnings.
So, the selected statements are the first two.