True or false If the profits of a business increase from one year to the next,...
True or false
If the profits of a business increase from one year to the next, the company will usually increase the preferred stock dividend amount.
Homework Answers
False.
Reason : Preference stock dividends are fixed rate of dividends, irrespective of the company's performance the company has to pay fixed dividend for preferred stock holders(Preference Shareholders).
The benefit or loss in the companies financial performance will be borne by Equity shareholders.
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