If You Own 100 Preferred Shares That Is Cumulative and Is

question 19

Multiple Choice

If you own 100 preferred shares that is cumulative and is currently 1 year in arrears, what total amount would you be owed if the company has sufficient funds to pay all dividends.The preferred share has a $4 dividend.

• A)$400
• B)$800
• C)$4
• D)$8
• E)$12

---

Definitions:

Residual Income

The excess of operating income over a minimum acceptable operating income.

Operating Cash Flows

Operating cash flows refer to the cash generated from the normal operations of a business, including cash receipts and payments for goods, services, and other routine company activities.

Financial Performance

A measure of how well a company uses its assets to generate revenues and manage its financial activities.

Operating Income

Income generated from regular business operations, calculated by subtracting operating expenses from gross profit.