Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as ________.

Question

Quizplus · Accepted Answer

Cumulative preferred stocks require any missed dividend payments to be paid in the future to the preferred shareholders before the common shareholders can receive any dividends. Noncumulative preferred stocks do not accumulate unpaid dividends. Common stocks do not have any preferential treatment for dividends. Participating preferred stock allows preferred shareholders to also receive additional dividends along with common shareholders if the company exceeds its expected profits.

Stock for Which Any Missed Dividend Payments Must Be Paid