Which of the following statements is true?
A)Dividends are guaranteed to preferred shareholders.
B)Dividends accumulate on common shares.
C)Dividends are only issued if the board of directors declares them.
D)Dividends are paid to all classes of shares on the same basis.

Question

Quizplus · Accepted Answer

Dividends are not guaranteed and are only issued at the discretion of the board of directors. Preferred shareholders may have priority over common shareholders in receiving dividends, but it is still not a guaranteed payout for them. Common shareholders do not typically have dividends that accumulate. Dividends may also be paid out differently among different classes of shares.

Which of the Following Statements Is True