Maneesh 02 May 2020 at 13:29 PM

Which one of the following statements is correct regarding the effect preferred stock has on a company?

A) Control of the firm is now shared by the common and preferred shareholders, with preferred shareholders having greater control.
B) The firm's after-tax profits are shared equally by common and preferred shareholders
C) Preferred shareholders' claims take precedence over the claims of common shareholders in the event of liquidation.
D) Nonpayment of preferred dividends places the firm in default, as does nonpayment of interest on debt