Holders of common stock must be made aware of possible restrictions on common dividends when the preferred stock is
A) convertible.
B) cumulative.
C) callable.
D) noncumulative.

Question

Quizplus · Accepted Answer

Preferred stock with cumulative dividends means that if the company does not pay the full dividend on the preferred stock, the missed dividends accumulate and must be paid later. This reduces the amount of available funds for common dividends, potentially limiting or restricting their distribution.

Holders of Common Stock Must Be Made Aware of Possible