Which of the following statements correctly describes the difference between common stock dividends and preferred stock dividends in a corporation?
A) Common stock dividends are typically fixed, while preferred stock dividends can fluctuate based on company performance.
B) Preferred stock dividends must be paid before common stock dividends, ensuring that preferred shareholders receive their dividends first.
C) Common stock dividends are guaranteed and must be paid out each year, whereas preferred stock dividends are not guaranteed.
D) Preferred stock dividends are always reinvested into the company, while common stock dividends are paid out to shareholders.