With regard to preferred stock, a. Its stockholders may have the right to participate, along with...
With regard to preferred stock, a. Its stockholders may have the right to participate, along with common stockholders, if an extra dividend is declared. b. No dividends are expected by the stockholders. c. Its issuance provides no flexibility to the issuing company because its terms always require mandatory dividend payments. d. There is a legal requirement for a corporation to declare a dividend on preferred stock.
Homework Answers
| With regard to preferred stock the following statements are interpreted as follows: | |||
| a) | Its stockholders may have the right to participate, along with common stockholders, if an extra dividend is declared | TRUE | |
| b) | No dividends are expected by the stockholders | FALSE | Dividends must be declared if there is profit at the pre deternined% |
| c) | Its issuance provides no flexibility to the issuance company because its terms always require mandatory dividend payments. | TRUE | Yes the terms are mandatory for payment of dividend as mentioned in the Memorandom of Articles |
| d) | There is a legal requirement for a corporation to declare a dividend on preferred stock. | TRUE | |
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With regard to preferred stock, a. Its stockholders may have the right to participate, along with...
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