Q575
Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as
A.
non-participating preferred stock
B.
participating preferred stock
C.
non-cumulative preferred stock
AnswerD.
cumulative preferred stock
Answer: Option C
Solution
Answer: Option C
Solution:
Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as non-cumulative preferred stock. Noncumulative preferred stock is a type of preferred stock that allows the issuing company to skip dividends and which then cancels the company's obligation to eventually pay those dividends.