Some preferred shares are participating preferreds and this may allow for an increase in the preferred share dividend when the common share dividend equals the preferred share dividend.

Question

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Participating preferred shares allow for the preferred shareholders to receive their stated dividend and also participate in any additional dividends paid to common shareholders, up to a certain limit. So, when the common share dividend equals the preferred share dividend, these participating preferred shares may see an increase in their dividend payout.

Some Preferred Shares Are Participating Preferreds and This May Allow