Edison Power and Light Has an Outstanding Issue of Cumulative

question 36

Multiple Choice

Edison Power and Light has an outstanding issue of cumulative preference shares with an annual fixed dividend of $2.00 per share.It has not paid the preferred dividend for the last three years, but intends to pay a dividend on the ordinary shares in the coming year.Before Edison can pay a dividend on the ordinary shares

• A)preferred shareholders may cast all their votes for a single director.
• B)preferred shareholders must receive dividends totalling $8.00 per share.
• C)preferred shareholders must receive $2.00 per share.
• D)will not necessarily receive any dividend.