If Preferred Shares Are Noncumulative, Then

question 36

Multiple Choice

If preferred shares are noncumulative, then:

• A)Cash dividends not declared in prior years are lost permanently.
• B)The preferred shareholders are entitled to current and arrears of dividends before common shareholders can receive dividends.
• C)Prior years' cash dividends must be paid to the preferred shareholders before any dividends may be paid to the common shareholders.
• D)The preferred shareholders are only entitled to a specific percent of the cash dividends, regardless of the amount declared.

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Definitions:

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, themselves, and other humans.

Systematic Mistake

Refers to consistent, predictable errors made by individuals or systems due to flaws in the decision process or design.

Consumer Reports

Independent evaluations and reviews of consumer products and services.

Ultimatum Game

A game in economic experiments where one player proposes how to divide a sum of money with another player who then can accept or reject the offer.