Kathy Faust was paid all of her past dividends before any common stock dividends were declared.Obviously,she profited from preferred stock's ________ feature.

Question

Quizplus · Accepted Answer

The given scenario suggests that Kathy Faust owns preferred stock with a cumulative feature. This means that any past unpaid dividends on her preferred stock must be paid off before any dividends can be declared for common stockholders. This ensures that preferred stockholders receive a consistent stream of dividends and do not miss out on payments.

Kathy Faust Was Paid All of Her Past Dividends Before