Question

Which one of the following is a true statement?

a) Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
b) Preferred stockholders have voting power.
c) Investors can sue managers for non-payment of preferred dividends.
d) Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.

Answer 1

A. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock

Step-by-step explanation: