A Cumulative Dividend on Preferred Stock

question 112

Multiple Choice

A cumulative dividend on preferred stock:

• A) must be paid at a later date, usually with interest.
• B) can be skipped even if dividend payments are made to common stockholders.
• C) are paid to stockholders at the discretion of the board of directors.
• D) must be paid at a later date, usually without interest.
• E) are treated like interest payments on bonds.

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Definitions:

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