A Cumulative Dividend Preference Means That

question 104

Multiple Choice

A cumulative dividend preference means that:

• A) preferred stockholders are paid dividends before common stockholders are paid dividends for the current year only.
• B) unpaid dividends to preferred stockholders accumulate and must be paid before common stockholders receive dividends.
• C) preferred stockholders are paid their full fixed dividend rate each period as long as the company is in operation.
• D) unpaid cash dividends to preferred stockholders must be replaced with stock dividends during the current

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Definitions:

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