Preferred stock that allows preferred stockholders to share with common stockholders any dividends paid in excess of the percent or dollar amount stated on the preferred stock is called:
A)Convertible preferred stock.
B)Participating preferred stock.
C)Premium stock.
D)Cumulative preferred stock.
E)Common stock .

Question

Quizplus · Accepted Answer

This type of preferred stock is called participating preferred stock. It allows preferred stockholders to receive additional dividends beyond the stated amount if the company has excess profits. This enables preferred stockholders to share in the success of the company.

Preferred Stock That Allows Preferred Stockholders to Share with Common