A Current Dividend Preference Means That

question 134

Multiple Choice

A current dividend preference means that:

• A)preferred stockholders are paid current dividends before common stockholders are paid dividends.
• 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.

---

Definitions:

Economic Growth

A rise in the output of goods and services in the economy, measured from one time period to another.

Consumer Goods

Items bought by the typical consumer for their own use, encompassing long-lasting items, perishable products, and various services.

Capital Goods

Physical assets that a company uses in the production process to manufacture products and services that consumers will later use.

Opportunity Cost

Giving up possible benefits from other solutions when a single solution is chosen.