Preferred stock can be cumulative, which means that if a dividend payment is missed, it accumulates and must be paid before any dividends can be paid to common stockholders. Preferred stock also typically has preference to dividends over common stockholders, but it does not necessarily have equal rights to common stock. Therefore, option A is the best choice.

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Preferred Stock Can

Question 37

Multiple Choice

Preferred stock can:

A) Be cumulative
B) Have equal rights to common stock
C) Never receive dividends in arrears
D) Never have preference to dividends over common stockholders
E) None of these

Correct Answer: