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8. Which of the following statements is true? a. Preferred stock has a stated maturity date. b. The company repays the par va
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  • Correct Option is Option ‘D’ Some preferred stocks are cumulative in dividends, meaning that if a company skips a cash dividend, it must pay it at some point in future.
  • Cumulative preferred stocks are those where if in any year the dividend is not given to stockholder’s, the dividend stays in ARREAR.
    This arrear of dividend is paid in coming future when sufficient net income/retained earnings is available before any dividend is given to common stock holders.
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