With Respect to Preferred Shares,select the Statement That Is Correct

question 20

Multiple Choice

With respect to preferred shares,select the statement that is correct.

• A)They must have a par value.
• B)They are never issued without voting privileges.
• C)They cannot exist unless there also are common shares.
• D)They always provide for a fixed payment to be made to the shareholders even for years when no dividends have been declared.

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Definitions:

Dividends

A distribution of a portion of a company's earnings to its shareholders, usually determined by the board of directors.

Operating Activities

Cash flows directly related to the production and delivery of a company's goods and services.

Direct Method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

Indirect Method

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.