A Current Dividend Preference Means That

question 97

Multiple Choice

A current dividend preference means that:

• A)preferred shareholders are paid dividends before common shareholders are paid dividends.
• B)unpaid dividends to preferred shareholders accumulate and must be paid before common shareholders receive dividends.
• C)preferred shareholders are paid their full fixed dividend rate each period as long as the company is in operation.
• D)unpaid cash dividends to preferred shareholders must be replaced with stock dividends during the current period.

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Definitions:

Surplus Greater

A scenario where the quantity of goods produced or available exceeds the quantity demanded, often leading to lower prices or waste.

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