Question
Which of the following statements pertaining to preferred shares is correct? A- If the preferred shares are non-cumulative, the current year's net income would be
Which of the following statements pertaining to preferred shares is correct?
A- If the preferred shares are non-cumulative, the current year's net income would be allocated to the preferred shares whether or not preferred dividends are declared.
B-There can never be any dividends in arrears when preferred shares are cumulative.
C-If the preferred shares are non-cumulative, only the current year's net income would be allocated to preferred shares if preferred dividends are declared, since dividends are never in arrears with non-cumulative preferred shares.
D-If the preferred shares are cumulative, the current year's net income would be allocated to the shares, only if dividends are declared in the year.
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