If you receive a cash dividend before any of the common shareholders you own Treasury stock.

Question

True or False

Please pick one

Answer 1

Hello,

The correct answer here is False.

Preferred stock, not Treasury stock, is the stock that pays a dividend before the common stockholders are paid.

Treasury stock is stock that the company has bought back from the market and will either retire or use for programs such as employee stock/option grants.

I hope that this is helpful.

Best,

Shawn