In a scenario where a company has both common and preferred stock, how does the dividend preference impact the distribution of dividends?

• A. Common shareholders receive their dividends first, and preferred shareholders receive any remaining dividends.
• B. Both common and preferred shareholders receive dividends simultaneously.
• C. Preferred shareholders receive their dividends first, and common shareholders receive any remaining dividends.
• D. Preferred shareholders receive dividends only if the company has excess profits.

Answer: (C)