Not paying the dividends on a cumulative preferred issue may result in:
A) preferred dividend arrears that can be eliminated by the common shareholders only after common dividends are paid.
B) voting rights are granted to preferred stockholders if preferred dividends are in arrears.
C) no payment of dividends to common shareholders.
D) Both preferred dividend arrears that can be eliminated by the common shareholders only after common dividends are paid; and voting rights are granted to preferred stockholders if preferred dividends are in arrears.
E) Both voting rights are granted to preferred stockholders if preferred dividends are in arrears; and no payment of dividends to common shareholders.

Question

Quizplus · Accepted Answer

The Answer of Not paying the dividends on a cumulative preferred issue may result in:
A) preferred dividend arrears that can be eliminated by the common shareholders only after common dividends are paid.
B) voting rights are granted to preferred stockholders if preferred dividends are in arrears.
C) no payment of dividends to common shareholders.
D) Both preferred dividend arrears that can be eliminated by the common shareholders only after common dividends are paid; and voting rights are granted to preferred stockholders if preferred dividends are in arrears.
E) Both voting rights are granted to preferred stockholders if preferred dividends are in arrears; and no payment of dividends to common shareholders.

Not Paying the Dividends on a Cumulative Preferred Issue May