Preferred stock which confers rights to prior periods' unpaid dividends even if they were not declared is called:
A)Noncumulative preferred stock.
B)Participating preferred stock.
C)Callable preferred stock.
D)Cumulative preferred stock.
E)Convertible preferred stock.

Question

Quizplus · Accepted Answer

Cumulative preferred stock confers the right to prior periods' unpaid dividends even if they were not declared. This means that if a company misses a dividend payment, those missed payments accumulate and must be paid before any dividends can be paid out to common stockholders.

Preferred Stock Which Confers Rights to Prior Periods' Unpaid Dividends