The Cumulative Feature of Preferred Shares

Multiple Choice

The cumulative feature of preferred shares

A) limits the amount of cumulative dividends to the par value of the preferred shares.
B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders.
C) means that the shareholder can accumulate preferred shares until they are equal to the stated value of common shares, at which time they can be converted into common shares.
D) enables a preferred shareholder to accumulate dividends until they equal the stated value of the shares and receive the shares in place of the cash dividends.