Historically, there have been issues entitling the preferred stockholder to participate in earnings distribution beyond the specified amount (based on some formula). Preferred stock with this feature is referred to as ________.

Question

Quizplus · Accepted Answer

Participating preferred stock entitles the holder to participate in the distribution of earnings beyond the specified amount. Redeemable preferred stock can be redeemed by the issuer at a certain time or price. Convertible preferred stock can be converted into common stock at the option of the holder. Cumulative preferred stock entitles the holder to accumulate unpaid dividends for future payment.

Historically, There Have Been Issues Entitling the Preferred Stockholder to Participate