Preferred stock that limits stockholders to receiving only the stated amount as a dividend is called:
A)Cumulative preferred stock.
B)Callable preferred stock.
C)Nonparticipating preferred stock.
D)Convertible preferred stock.
E)Participating preferred stock.

Question

Quizplus · Accepted Answer

Nonparticipating preferred stock limits stockholders to only receiving the stated amount as dividend without any additional participation in the company's earnings, unlike participating preferred stock. Cumulative preferred stock allows missed dividend payments to accumulate and be paid in the future. Callable preferred stock can be bought back by the company at a specified price. Convertible preferred stock can be exchanged for common stock.

Preferred Stock That Limits Stockholders to Receiving Only the Stated