If a Preferred Stock Is of the Cumulative Type

Multiple Choice

If a preferred stock is of the cumulative type,

A) dividends must be paid on an equal basis with common stock, so long as earnings permit.
B) dividends cannot be passed if they are earned.
C) dividends must be paid, and if not a liability is created.
D) unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders.