Preferred stock on which the right to be paid both the current and all prior periods' unpaid dividends before any dividend is paid to common stockholders is called:
A)Noncumulative preferred stock
B)Participating preferred stock
C)Callable preferred stock
D)Cumulative preferred stock
E)Convertible preferred stock

Question

Quizplus · Accepted Answer

Cumulative preferred stock has the right to be paid both the current and all prior periods' unpaid dividends before any dividend is paid to common stockholders. Noncumulative preferred stock only has the right to be paid current dividends, without the ability to collect any missed dividends in prior periods. Participating preferred stock has the right to receive additional dividends beyond what is normally distributed to preferred stockholders. Callable preferred stock is stock that can be repurchased by the issuer at a specified price. Convertible preferred stock can be converted by the stockholder into a specified number of common shares.

Preferred Stock on Which the Right to Be Paid Both