Q624
Type of preferred stock whose paid dividends are more than promised dividends is classified as
A.
non cumulative preferred stock
B.
cumulative preferred stock
C.
non participating preferred stock
D.
participating preferred stock
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Type of preferred stock whose paid dividends are more than promised dividends is classified as participating preferred stock. Participating preferred stock is a type of preferred stock that gives the holder the right to receive dividends equal to the customarily specified rate that preferred dividends are paid to preferred shareholders, as well as an additional dividend based on some predetermined condition.