Some preferred stocks are participating preferreds and this may allow for an increase in the preferred stock dividend when the common stock dividend equals the preferred stock dividend.

Question

Quizplus · Accepted Answer

Participating preferreds allow for an increase in the preferred stock dividend when the common stock dividend equals the preferred stock dividend. This means that the preferred shareholders will receive additional dividends alongside their fixed dividend rate.

Some Preferred Stocks Are Participating Preferreds and This May Allow