What Is Cumulative Preferred Stock

Multiple Choice

What is cumulative preferred stock?

A) By law,the preferred stock cannot pay dividends out every year.
B) Preferred shareholders vote whereas common shareholders do not.
C) This stock's dividend payments are automatically reinvested into the firm,thus allowing for compounding the return on investment.
D) If dividend payments are missed in one year,they are paid later and are paid before any common stock dividends.
E) Cumulative preferred shareholders have the right to purchase shares of a new stock issue before it is offered to the general public.