Preferred stock:
A) represents the residual ownership of a corporation.
B) is generally issued only by new firms that are small in size.
C) has a fixed maturity date similar to a bond.
D) dividends can be skipped at the discretion of the company president.
E) may or may not be cumulative.

Question

Quizplus · Accepted Answer

Preferred stock may have cumulative dividends, meaning missed dividends must be paid before common dividends, or non-cumulative, where missed dividends do not accumulate.

Preferred Stock