A ________ Is a Written Promise to Pay a Specified

question 129

Short Answer

A ________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

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Definitions:

Noncumulative Nonparticipating

Noncumulative nonparticipating refers to a type of preferred stock where dividends do not accumulate if not declared and the stockholders do not participate in additional corporate earnings beyond the specified dividend rate.

Cash Dividends

Payments made by a company to its shareholders, usually in the form of cash, out of its profits or reserves.

Stated Rate

The annual interest rate declared on a financial instrument, such as a bond, without accounting for compounding within a year.

Nonparticipating

A term often used in insurance to describe a policy that does not grant the holder the rights to share in the insurer's surplus or dividends.