Chapter 18: Book Value per Share

Noncumulative preference share dividends in arrears a. Are not paid and not disclosed b. Must be paid before any other cash dividends can be distributed c. Are disclosed as liability until paid d. Are paid to preference shareholders if sufficient funds remain after payment of ordinary dividend

a. Are not paid and not disclosed

How should cumulative preference shared dividends in arrears be reported? a. Note disclosure b. Increase in shareholders' equity c. Increase in current liabilities d. Increase in noncurrent liabilities

a. Note disclosure

Preference shares participate ratably with the ordinary shareholders in any profit distribution beyond the prescribed preference rate. a. Cumulative feature b. Participating feature c. Callable feature d. Redeemable feature

b. Participating feature

Which of the following shareholder rights is most commonly enhanced in an issue of preference shares? a. The right to vote for the Board of Directors b. The right to maintain one's proportional interest c. The right to receive the full cash dividend before dividends are paid to other classes of share capital d. The right to vote on major corporate issues

c. The right to receive the full cash dividend before dividends are paid to other classes of share capital

Which feature of preference share would most likely be opposed by ordinary shareholders a. Convertible b. Callable c. Redeemable d. Participating

d. Participating