Edison Power of light has an outstanding issue of cumulative preferred stock with an annual fixed dividend of $2.00 per share.It has not paid the preferred dividend for the last 3 years,but intends to pay a dividend on the common stock in the coming year.Before Edison can pay a dividend on the common stock

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Preferred shareholders must receive dividends totaling $8.00 per share because the preferred stock is cumulative, meaning missed dividends must be paid before any dividends can be paid to common shareholders.

Edison Power of Light Has an Outstanding Issue of Cumulative