Which of the Following Is a Correct Statement About Cumulative

question 34

Multiple Choice

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

• A)They both receive dividends in arrears.
• B)Cumulative stock's undeclared dividends accumulate each year until paid, while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared.
• C)Cumulative preferred stock is guaranteed to receive their dividends.
• D)Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared.However, noncumulative stock's undeclared dividends accumulate each year until paid.

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Definitions:

Vertical Axis

In graphing, the y-axis, which typically represents the dependent variable or the quantity being measured.

Utility Function

A mathematical representation that shows the relationship between an individual's consumption bundle and the level of satisfaction or utility derived from it.

Indifference Curves

Indifference curves are graphical representations used in microeconomics to demonstrate a consumer's preferences for various combinations of two goods, keeping satisfaction constant.

Horizontal Axis

A reference line on a graph or chart running left to right, typically used to represent the independent variable or basis of comparison.