If a Preferred Stock Is of the Cumulative Type

question 17

Multiple Choice

If a preferred stock is of the cumulative type,:

• A) the dividends must be paid on an equal basis with common so long earnings permit.
• B) the dividends cannot be passed if they are not earned.
• C) the cumulative voting rule applies in the exercise of the voting privilege.
• D) unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common shareholders.

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Definitions:

Journal

A periodical publication, often focused on a particular academic or professional field, commonly used to disseminate research findings.

Press Conference

A meeting organized for the purposes of distributing information to the media and answering questions from reporters.

Controlled Conditions

Situations or experiments where all variables are managed or regulated to isolate cause and effect relationships.

Second Variable

In research or mathematics, a variable typically referred to after the independent variable, which can be manipulated or measured to observe its effects on the dependent variable.