How does a preferred stock dividend differ from a common stock dividend?

1. Preferred stock usually has a dividend amount set at the time the stock is issued. 2. Those dividends must be paid before the company can pay any dividends to common stockholders. 3. If the firm goes bankrupt and sells its assets, preferred stockholders get their money back before common stockholders do. 4. Preferred dividends are still paid from after-tax income, so they are never deducted before the tax charge. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.5 Equity Financing_