Which One of the Following Statements Concerning Preferred Stock Is

question 80

Multiple Choice

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

• A)Unpaid preferred dividends are a liability of the firm.
• B)Preferred dividends must be paid quarterly provided the firm has net income that exceeds the amount of the quarterly dividend.
• C)Preferred dividends must be paid timely each quarter or the unpaid dividends start accruing interest.
• D)All unpaid dividends on preferred stock, regardless of the type of preferred, must be paid before any income can be distributed to common shareholders.
• E)Preferred shareholders may be granted voting rights and seats on the board if preferred dividend payments remain unpaid.

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