Nonparticipating preferred stock allows stockholders an opportunity to receive a higher percentage of dividends than promised, before any dividends are paid to common stockholders.

Question

Quizplus · Accepted Answer

Nonparticipating preferred stockholders receive only the fixed dividend rate and do not have the opportunity to receive additional dividends beyond what is promised, unlike participating preferred stockholders.

Nonparticipating Preferred Stock Allows Stockholders an Opportunity to Receive a Higher