Which of the following best describes preferred stockholders?

Preferred stockholders are best described as those who obtain a fixed dividend before common stockholders. This characteristic is fundamental to preferred stock and distinguishes it from common stock. Preferred stock typically offers investors a fixed dividend rate, which is paid at regular intervals, such as quarterly, ensuring that these stockholders receive their dividends prior to any distributions made to common stockholders.

This preferential treatment in dividend payments reflects the higher claim that preferred stockholders have on the income generated by a corporation, compared to common stockholders who might only receive dividends once preferred dividends have been fully paid out. Additionally, in cases of liquidation, preferred stockholders are also prioritized over common stockholders for asset distribution after liabilities are settled, further highlighting their preferential status. However, it is important to note that preferred stockholders generally do not have voting rights in corporate decisions, which aligns them more closely with debt than equity in the capital structure.

This understanding underscores why the option indicating that preferred stockholders receive a fixed dividend before common stockholders is the correct choice.