$3 cumulative preferred shares means that each preferred shareholder is eligible to receive
A)a quarterly dividend of $3 per share.
B)an annual dividend of $3 per share.
C)a monthly dividend of $3 per share.
D)no dividend.

Question

Quizplus · Accepted Answer

Cumulative preferred shares guarantee that shareholders receive dividends, and if any are missed, they are accumulated and paid out before common shareholders receive any. The "$3 cumulative preferred shares" implies an annual dividend of $3 per share, not specifying the frequency (e.g., quarterly or monthly).

$3 Cumulative Preferred Shares Means That Each Preferred Shareholder Is