Which One of the Following Statements Is Correct Concerning Stock

question 59

Multiple Choice

Which one of the following statements is correct concerning stock dividends?

• A) Common stock dividends cannot be paid if preferred stock dividends are in arrears.
• B) Preferred stock dividends cannot be paid if common stock dividends are in arrears.
• C) Common and preferred dividends must be paid simultaneously.
• D)No stock dividends can be paid without specific shareholder approval.

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Definitions:

Terminal Value

The estimated value of a business or project at the end of a specific period, taking into account future cash flows in perpetuity.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

P/E Ratio

The Price-to-Earnings Ratio is a financial metric comparing a company's share price to its earnings per share, indicating the value that investors place on a company's earning ability.

Cram-Down Round

A financing event where existing shareholders see their stakes diluted due to new, often unfavorable funding accepted to prevent company failure.