Which of the following statements is correct?
A)Common shares have priority over preferred shares.
B)All issued shares are eligible to vote for the board of directors.
C)The number of shared issued number outstanding number authorized.
D)A share with cumulative dividends must be a preferred share.

Question

Which of the following statements is correct?
A)Common shares have priority over preferred shares.
B)All issued shares are eligible to vote for the board of directors.
C)The number of shared issued > number outstanding > number authorized.
D)A share with cumulative dividends must be a preferred share.

Quizplus · Accepted Answer

Cumulative dividends are a feature of preferred shares, where if dividends are not paid in any year, they accumulate and must be paid out before any dividends can be paid to common shareholders. Common shares typically do not have this feature.

Which of the Following Statements Is Correct