Which of the Following Statements Pertaining to Preferred Shares Is

question 60

Multiple Choice

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

• A) If the preferred shares are participating, only the current year's Net Income would be allocated to the preferred shares.
• B) If the preferred shares are non-cumulative, only the current year's Net Income would be allocated to preferred shares, since dividends are never in arrears with non-cumulative preferred shares.
• C) If the preferred shares are participating, the current year's Net Income would be allocated to the shares, only if the subsidiary is fully owned by the parent.
• D)There can never be any dividends in arrears when preferred shares are participating.