Which of the Following Statements Pertaining to Preferred Shares Is

question 20

Multiple Choice

Which of the following statements pertaining to preferred shares is correct?

• A) If the preferred shares are non-cumulative, the current year's net income would be allocated to the preferred shares whether or not preferred dividends are declared.
• B) If the preferred shares are non-cumulative, only the current year's net income would be allocated to preferred shares if preferred dividends are declared, since dividends are never in arrears with non-cumulative preferred shares.
• C) If the preferred shares are cumulative, the current year's net income would be allocated to the shares, only if dividends are declared in the year.
• D) There can never be any dividends in arrears when preferred shares are cumulative.

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Definitions:

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Stacked Column Chart

A variant of the column chart that segments each column into multiple categories, representing parts of the whole.

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An artistic technique used to create tonal or shading effects by drawing closely spaced parallel lines that may intersect with another set of parallel lines.