Common features of preferred stock include
A) fixed, cumulative dividends
B) variable, cumulative dividends
C) fixed, non‑cumulative dividends
D) variable, non‑cumulative dividends

Question

Common features of preferred stock include​
A) ​fixed, cumulative dividends
B) ​variable, cumulative dividends
C) ​fixed, non‑cumulative dividends
D) ​variable, non‑cumulative dividends

Quizplus · Accepted Answer

Preferred stock typically pays fixed dividends, and these dividends may be cumulative, meaning that if the company is unable to make a dividend payment in a given period, the unpaid amount will accumulate and must be paid before common stock dividends can be paid. Variable dividends are less common for preferred stock. Non-cumulative dividends mean that if the company is unable to make a dividend payment in a given period, the unpaid amount does not carry over to future periods.

Common Features of Preferred Stock Include​

Common Features of Preferred Stock Include