Which of the Following Is the Reason That Preferred Dividends

question 91

Multiple Choice

Which of the following is the reason that preferred dividends declared during the period are deducted from net income in calculating return on common stockholders' equity?

• A)Preferred dividends reduce the amount of income available for distribution to common stockholders.
• B)Preferred dividends are not paid from net income.
• C)Preferred dividends are not a part of stockholders' equity.
• D)Preferred dividends are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation.

---

Definitions:

Karyotype

Chromosomes arranged by pairs according to their size, shape, and general appearance in mitotic metaphase.

Homologous Chromosomes

Pairs of chromosomes in a diploid organism that are similar in shape, size, and gene content, one inherited from each parent.

Autosomes

Chromosomes that are not sex chromosomes; they come in pairs of matching chromosomes and contain the bulk of an organism’s genetic material.

Chromosome Deletion

A genetic mutation where a part of a chromosome or a sequence of DNA is lost during DNA replication, which can lead to diseases or abnormalities.