Passed Dividends on Cumulative Preferred Shares

question 79

Multiple Choice

Passed dividends on cumulative preferred shares:

• A) must be paid by January 1 of the following year by law
• B) are lost forever by the preferred shareholders
• C) are a liability until paid and may turn into a long-term liability with the passage of time
• D) are referred to as dividends in arrears

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Definitions:

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all of the data will fall within three standard deviations of the mean.

Median

The middle value in an ordered list of numbers, or the average of the two middle numbers when the list has an even number of observations.

Range

The difference between the highest and lowest values in a dataset, a simple measure of the spread or dispersion of the data points.

Standard Deviation

A statistical measure that quantifies the dispersion or spread of a set of data points.