Cumulative Preferred Stock Features

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Question

Which of the following is usually not a feature of cumulative preferred stock?

Answers

A. Has priority over common stock with regard to assets.

B. Has priority over common stock with regard to earnings.

C. None of these answers.

D. Has the right to receive dividends in arrears before common stock dividends can be paid.

E. Has voting rights.

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Explanations

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A. B. C. D. E.

Preferred stock does not usually have voting rights. Preferred shareholders are usually given the right to vote for directors only if the company has not paid the preferred dividend for a specified period of time, such as 10 quarters.

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