The WaterGlove Corporation issues ________ preferred stock that requires the payment of a quarterly dividend of $5.00 per share.The WaterGlove Corporation falls behind with four quarterly payments, i.e., $20.00 per share of preferred stock.The next quarter, the corporation makes a profit of $25.00 per share.The corporation must pay the $20.00 per share of arrearages to the preferred shareholders plus this quarter's payment of $5.00 per share.

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Cumulative preferred stock requires that any missed dividend payments accumulate and must be paid in full before any dividends can be paid to common stockholders or any other class of equity. This means that even though the WaterGlove Corporation missed four quarterly payments, they still owe the preferred shareholders the full $20.00 per share of arrearages in addition to the current quarter's payment of $5.00 per share. Convertible, redeemable, and participating stock do not have this feature.

The WaterGlove Corporation Issues ________ Preferred Stock That Requires the Payment