Question

Stockholders who are prioritized in the distribution of a firm's dividends but cannot vote are called:

a) Preferred stockholders
b) Common stockholders
c) Bondholders
d) Debenture holders

Answer 1

Preferred stockholders are prioritized for dividends but lack voting rights, while common stockholders have voting rights but are not prioritized for dividends.

Step-by-step explanation:

The stockholders who are prioritized in the distribution of a firm's dividends but cannot vote are called preferred stockholders.

Preferred stockholders typically have a higher claim on the assets and earnings than common stockholders, who do have voting rights.

While preferred stockholders have priority in receiving dividends and may receive these dividends at a fixed rate, they typically do not have the right to vote on matters such as the election of the board of directors.