If Dividends Are Not Paid, Preferred Shares Usually Convert to Voting

question 15

True/False

If dividends are not paid, preferred shares usually convert to voting shares.

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Ownership Percentage

This refers to the fraction or percentage of a company or asset that is owned by a particular shareholder or investor.