Which of the Following Is a Correct Statement About Cumulative

question 89

Multiple Choice

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

• A)They both receive dividends in arrears.
• B)Cumulative stock's undeclared dividends accumulate each year until paid while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared.
• C)Cumulative preferred stock is guaranteed to receive its dividends.
• D)Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared while noncumulative stock's undeclared dividends accumulate each year until paid.

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