The Cumulative Feature of Preferred Shares

question 158

Multiple Choice

The cumulative feature of preferred shares

• A) limits the amount of cumulative dividends to the par value of the preferred shares.
• B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders.
• C) means that the shareholder can accumulate preferred shares until they are equal to the stated value of common shares, at which time they can be converted into common shares.
• D) enables a preferred shareholder to accumulate dividends until they equal the stated value of the shares and receive the shares in place of the cash dividends.

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Definitions:

Patient Records

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Heavy Cardboard

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Compactible Files

Likely a mistype or misunderstanding of "compatible files," which are files that can be opened or used in different software applications or systems without compatibility issues.