Question

What can we say about the dividends paid to common and preferred stockholders?

Answer 1

Dividends are payments made by companies to their stockholders as a share of their profits, and both common and preferred stockholders receive dividends.

Step-by-step explanation:

Dividends are payments made by companies to their stockholders as a share of their profits. There are dividends paid to both common and preferred stockholders. Common stockholders receive dividends based on the number of shares they own, while preferred stockholders receive a fixed dividend amount and they are paid before the common shareholders.

For example, if a company pays a dividend of 75 cents per share and someone owns 85 shares of common stock, they would receive a dividend payment of 85 × 0.75 = $63.75.