The Cumulative Feature of Preference Shares

Multiple Choice

The cumulative feature of preference shares

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