If a Preferred Stock Is of the Cumulative Type

question 17

Multiple Choice

If a preferred stock is of the cumulative type,:

• A) the dividends must be paid on an equal basis with common so long earnings permit.
• B) the dividends cannot be passed if they are not earned.
• C) the cumulative voting rule applies in the exercise of the voting privilege.
• D) unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common shareholders.

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Definitions:

Line Spacing

The distance between lines of text in a document, important for readability and the overall appearance of written material.

Effective Letter

A written communication that clearly conveys its intended message and achieves its purpose with the recipient.

Passive Voice

A grammatical construction in which the noun or noun phrase that would be the object of an active sentence appears as the subject of a sentence with passive voice.

Priority Mail

A postal service level that offers expedited delivery of packages and letters.