What Is the Difference Between Cumulative and Non-Cumulative Preferred Shares

question 125

Multiple Choice

What is the difference between cumulative and non-cumulative preferred shares?

• A) Cumulative preferred share's right to receive dividends is forfeited in any year that dividends are not declared. However, noncumulative preferred shares' undeclared dividends accumulate each year until paid.
• B) Cumulative does not receive dividends but noncumulative does.
• C) They both receive dividends in arrears.
• D) Cumulative preferred shares' undeclared dividends accumulate each year until paid, while non-cumulative preferred shares' right to receive dividends is forfeited in any year that dividends are not declared.

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Definitions:

Labor Unions

Organizations formed by workers from related fields that work for the collective rights of the members, including better wages, working conditions, and benefits.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate.

Wages

Payments made to workers for their labor, typically calculated on an hourly, daily, or piecework basis.

Landscaping Workers

Individuals engaged in the modification of visible features of an area of land, including living elements like flora and the shaping of landscapes.