Participating stock will:
A) share with common stock any additional dividends after preferred and common stockholders receive their normal dividends.
B) accumulate dividends that will be paid later.
C) participate in earnings only to the extent that all other classes do.
D) participate in earnings to the same extent as common stock.

Question

Quizplus · Accepted Answer

Participating stock is a type of preferred stock that entitles the shareholder to share with common stock in any additional dividends after preferred and common stockholders receive their normal dividends. This means that if the company pays more dividends than what is required to be paid to preferred and common stock, participating stockholders will also receive a portion of those additional dividends.

Participating Stock Will