The Cumulative Feature of Preferred Stock

question 7

Multiple Choice

The cumulative feature of preferred stock

• A) Limits the amount of cumulative dividends to the par value of the preferred stock.
• B) Requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders.
• C) Means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock.
• D) Enables a preferred stockholder to accumulate dividends until they equal the par value of the stock and receive the stock in place of the cash dividends.

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Definitions:

Standardized

The process of making something conform to a standard, often through testing, to ensure uniformity and comparability.

Oral Stage

The first stage in Freudian psychosexual development, occurring in the first year of life, where the mouth is the primary source of gratification and exploration.

Fixated

An obsessive or intense focus on an object, activity, concept, or person, potentially leading to dysfunctional behavior.

Adult

A person or organism that has reached full growth or maturity.