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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The cumulative feature of preference share * O limits the amount of cumulative dividends to the par value of the preference share requires that dividends not paid in any year must be made up in a later year before dividends are distributed to ordinary shareholders means that the shareholder can accumulate preference share until it is equal to the par value of ordinary share at which time it can be converted into ordinary share. enables a preference stockholder to accumulated dividends until they equal the par value of the stock and receive the stock in place of the cash dividends.
Transcribed Image Text:The cumulative feature of preference share * O limits the amount of cumulative dividends to the par value of the preference share requires that dividends not paid in any year must be made up in a later year before dividends are distributed to ordinary shareholders means that the shareholder can accumulate preference share until it is equal to the par value of ordinary share at which time it can be converted into ordinary share. enables a preference stockholder to accumulated dividends until they equal the par value of the stock and receive the stock in place of the cash dividends.
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