If preferred shares are non-participating, then:
A)Preferred shareholders are not entitled to a prior year's dividend once that year has passed.
B)Preferred shareholders are not entitled to vote.
C)Preferred shareholders may receive dividends in excess of a specific rate if common stockholders receive more than that specific rate.
D)Preferred dividends for the year are limited to a specific rate.

Question

Quizplus · Accepted Answer

Non-participating preferred shares mean that the dividends are limited to a specific rate, and shareholders do not receive more than this rate even if common stockholders receive higher dividends.

If Preferred Shares Are Non-Participating, Then