If a Preferred Stock Is of the Cumulative Type

question 16

Multiple Choice

If a preferred stock is of the cumulative type,

• A)dividends must be paid on an equal basis with common stock, so long as earnings permit.
• B)dividends cannot be passed if they are earned.
• C)the cumulative voting rule applies in the exercise of the voting privilege.
• D)unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders.

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Definitions:

Thorndike

Refers to Edward L. Thorndike, an American psychologist famous for his work on learning theory that led to the development of operant conditioning within behaviorism.

Reinforcement Strategies

Techniques used to encourage desired behaviors or discourage unwanted ones by providing consequences or rewards.

Social Learning Theory

A theory that suggests people learn from observing others, through modeling, imitation, and social reinforcement.

Rotter's Theory

A psychological theory developed by Julian B. Rotter that emphasizes the importance of an individual's perceived control over outcomes, known as locus of control.