Which of the following offers the option where the dividend obligation can be satisfied in cash or by issuing additional par amounts of the preferred security?
A)paid in kind preferred stock
B)cumulative preferred stock
C)participating preferred stock
D)convertible preferred stock

Question

Quizplus · Accepted Answer

The option where the dividend obligation can be satisfied in cash or by issuing additional par amounts of the preferred security is called paid in kind preferred stock. Therefore, the correct choice is (A). Cumulative preferred stock means that if the issuer misses a dividend payment, it accumulates and must be paid in the future. Participating preferred stock allows shareholders to receive additional dividends if the company surpasses a certain profitability threshold. Convertible preferred stock can be converted into common stock at the option of the holder, at a predetermined conversion ratio.

Which of the Following Offers the Option Where the Dividend