Origin Energy Has an Outstanding Issue of Cumulative Preference Shares

question 93

Multiple Choice

Origin Energy 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 3 years,but intends to pay a dividend on the ordinary shares in the coming year.Before Origin can pay a dividend on the ordinary shares,

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

---

Definitions:

Equity Accounts

Financial accounts that represent the owner's interest in a company, including common stock, preferred stock, and retained earnings.

Statement of Stockholders' Equity

A financial statement that outlines the changes in the equity section of the balance sheet during a specific period, including investments by and distributions to shareholders.

End-of-period Spreadsheet

A reporting tool used in accounting to compile all balances from ledgers, facilitating the preparation of financial statements.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to ensure accuracy in the financial statements.