A Cumulative Dividend Preference Means That

question 119

Multiple Choice

A cumulative dividend preference means that:

• A)preferred stockholders are paid dividends before common stockholders are paid dividends for the current year only.
• B)unpaid dividends to preferred stockholders accumulate and must be paid before common stockholders receive dividends.
• C)preferred stockholders are paid their full fixed dividend rate each period as long as the company is in operation.
• D)unpaid cash dividends to preferred stockholders must be replaced with stock dividends during the current period.

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Definitions:

Great Lakes

A group of five large freshwater lakes located on the border between the United States and Canada, known for being the largest group of freshwater lakes by surface area in the world.

Canada

A country located in the northern part of North America, known for its vast landscapes, multicultural diversity, and strong national healthcare system.

St.Lawrence River

A large river in North America, flowing from the Great Lakes to the Atlantic Ocean, and serving as a vital waterway for transportation and ecosystems.

Great Lakes

A group of five large, interconnected freshwater lakes located in North America, vital for transportation, water supply, and habitats.