A Cumulative Dividend Preference Means That

question 74

Multiple Choice

A cumulative dividend preference means that:

• A)preferred shareholders are paid dividends before common shareholders are paid dividends for the current year only.
• 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:

Deviation

In statistics, it refers to how far a particular data point is from the mean of the data set.

Negatively Skewed

A distribution with a tail that extends to the left, indicating that the majority of the data points are located towards the right of the mode.

Distribution

In statistics, the way in which data or values are spread or distributed across possible values or intervals.

Normal Distribution

A symmetric, bell-shaped distribution of data where most of the observations cluster around the central peak and the probabilities for values further away from the mean taper off equally in both directions.