Which of the Following Is a Correct Statement About Cumulative

question 117

Multiple Choice

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

• A)They both receive dividends in arrears.
• B)Cumulative stock's undeclared dividends accumulate each year until paid while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared.
• C)Cumulative preferred stock is guaranteed to receive its dividends.
• D)Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared while noncumulative stock's undeclared dividends accumulate each year until paiD.Cumulative preferred stockholders have the right to receive dividends in arrears when dividends are subsequently declared.