A preferred issue that will repay any arrearage on its dividends will have the following term on the certificate.

13 A preferred issue that will repay any arrearage on its dividends will have the following term on the certificate.______________________.

14 T or F: A company can issue a series of preferred that gives the holders the right to 12 votes.

Expert Solution

13.

Answer: Cumulative

Explanation: If a preference share is cumulative, then missed dividends are considered as arrears. It increases with each missed date of payment. Usually company may miss dividend payment due to losses or liquidity constraints.

Dividends for cumulative preference shares must be paid first, prior to any dividend payment to common shareholders.

14.

Answer: False

Explanation: Preferred shareholders does not get voting rights. Preferred issues get priority over distribution of income of company, so they receive dividend payment prior to common shareholders.

jeff jeffy answered 2 years ago

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Question

A preferred issue that will repay any arrearage on its dividends will have the following term on the certificate.

Solutions

Expert Solution

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