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Does any thing pay to the prefferred stockholders in case of loss?

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Question added by Abdul Rauf
Date Posted: 2016/01/30
Sultan Alghamdi
by Sultan Alghamdi

If a company is struggling and has to suspend its dividend, preferred shareholders may have the right to receive payment in arrears before the dividend can be resumed for common shareholders. In case of bankruptcy, a company will be required all the assets and pay off debt. However, preferred shareholders are not the first group of people who get paid. The usual order will be government, financial institutions, other creditors, bondholders, and then preferred shareholders. So, in some bankruptcy cases , preferred shareholders may not get paid off.

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