Dividends in Arrears on Cumulative Preferred Stock

question 10

Multiple Choice

Dividends in arrears on cumulative preferred stock

• A)never have to be paid, even if common dividends are paid.
• B)must be paid before common stockholders can receive a dividend.
• C)should be recorded as a current liability until they are paid.
• D)enable the preferred stockholders to share equally in corporate earnings with the common stockholders.

---

Definitions:

Lettuce

A leafy green vegetable commonly used in salads and other dishes for its crisp texture and mild, slightly bitter taste.

Kitchen Debate

A series of impromptu exchanges between U.S. Vice President Richard Nixon and Soviet Premier Nikita Khrushchev in 1959, symbolizing the ideological competition between the U.S. and the USSR during the Cold War.

Nikita Khrushchev

A Soviet statesman who led the Soviet Union during part of the Cold War as the First Secretary of the Communist Party of the Soviet Union from 1953 to 1964 and as Chairman of the Council of Ministers from 1958 to 1964.