ABC Corporation has fallen upon hard times and dividends on their non-cumulative, preferred stock have not been paid for three years.Which of the following is true?
A)common shareholders must now receive three years' worth of dividends.
B)preferred shareholders must now receive three years' worth of dividends.
C)the corporation must fold if preferred shareholders are not paid.
D)common shareholders have not received dividends for three years.

Question

Quizplus · Accepted Answer

Non-cumulative preferred stock does not accumulate unpaid dividends, so preferred shareholders are not owed past dividends. If dividends are not paid, common shareholders also do not receive dividends.

ABC Corporation Has Fallen Upon Hard Times and Dividends on Their