If a Preferred Stock Is of the Cumulative Type

question 30

Multiple Choice

If a preferred stock is of the cumulative type

• A) dividends must be paid on an equal basis with common so long earnings permit.
• B) dividends cannot be passed if they are 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:

Oligopoly Pricing

A pricing strategy used by firms in an oligopoly, where a few firms dominate the market, influencing prices through their actions and reactions.

Collusive Pricing Model

is a market situation where businesses agree on setting prices at a certain level to maximize collective profits, reducing competition.

Prisoner's Dilemma

A fundamental problem in game theory showing why two completely rational individuals might not cooperate, even if it appears that it is in their best interest to do so.

Advertising

The act or practice of promoting goods, services, or ideas through various forms of media to attract and engage potential consumers or audiences.