7.4 Preferred Stock
Preferred stock
7.4a Analysis of Preferred Stock
related to current earnings and the company’s future earning capacity,
Why might it be important reputationally for a company to keep paying dividends even during a loss-making year?
Preferred stock dividends are paid after interest but before dividends to common stock.
Common features of preferred stock include:
Dividends can be paid to the preferred shareholders even if the company is operating at a loss.