Q558
Type of preferred stock in which dividend does not increase or decrease with increase or decrease in profit of firm is classified as
A.
non-cumulative preferred stock
B.
cumulative preferred stock
C.
non-participating preferred stock
AnswerD.
participating preferred stock
Answer: Option C
Solution
Answer: Option C
Solution:
Type of preferred stock in which dividend does not increase or decrease with increase or decrease in profit of firm is classified as non-participating preferred stock. Non-participating preferred stock is preferred stock that specifically limits the amount of dividends paid to its holders.