Which Statement About Cumulative Preferred Stock Is FALSE

question 38

Multiple Choice

Which statement about cumulative preferred stock is FALSE?

• A)A company does not have to pay a preferred stock dividend every year.
• B)No dividends can be paid to common stockholders until all current and prior year preferred stock dividends are paid.
• C)All dividends in arrears must be disclosed in a footnote to a company's balance sheet.
• D)Any dividends in arrears are considered to be a liability since the company is obligated to pay these dividends.
• E)In the event of liquidation,cumulative unpaid dividends must be paid before common stockholders receive any cash.

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Definitions:

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Ownership Of Copyright

pertains to the legal right granted to the creator of original work, providing them exclusive authority over the use, distribution, and adaptation of that work.

Copyright Act

Legislation that protects the rights of creators by providing them exclusive rights to their original works, preventing unauthorized use or distribution.

Statutory Damages

Predetermined sums of money that a person can be ordered to pay for infringing upon certain laws, regardless of actual damages.