Which of the following statements correctly describes the differences between common stock dividends and preferred stock dividends?
a. Common stock dividends are paid before preferred stock dividends, and preferred stock dividends are fixed and must be paid before any common stock dividends.
b. Preferred stock dividends are typically variable and depend on the company's profits, while common stock dividends are fixed and paid at regular intervals.
c. Common stock dividends are paid to shareholders based on a fixed rate, whereas preferred stock dividends are paid based on a percentage of the stock's market value.
d. Preferred stock dividends are subordinate to common stock dividends, meaning they are paid after common stock dividends have been distributed.