Question

If a preferred stock issue is cumulative, this means

A. dividends are paid at the end of the year

B. dividends is legally binding on the corporation

C. unpaid dividends will be paid in the future

D. unpaid dividends are never repaid



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Answer 1

Answer:

option c is your answer

Explanation:

hope it will help you

Answer 2

The correct answer is: (option c) unpaid dividend will be paid in future.

If a preferred stock issue is cumulative, this means unpaid dividends will be paid in the future.

• A type of preferred stock known as the cumulative preferred stock has a clause that mandates that cumulative preferred stockholders must be paid any overdue dividends before anybody else.
• A particular kind of stock known as preferred stock is given specific privileges that set it apart from common stock. Preferred stock, in specific, generally provides bigger dividend payouts and a greater claim to assets in the case of a liquidation. The primary distinction between preferred and common stock is that common stock offers stockholders voting rights, whereas preferred stock does not. Preferred shareholders receive dividend payments earlier than common shareholders since they have priority over the company's profits.

Therefore, If a preferred stock issue is cumulative, this means (option c) unpaid dividends will be paid in the future.

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