A type of preferred stock for which any dividends missed in prior years must be paid before common shareholders may receive any dividends is referred to as:

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The type of preferred stock that requires that any dividends missed in prior years be paid before common shareholders may receive any dividends is referred to as cumulative preferred stock. Participating preferred stock allows the preferred shareholders to earn extra dividends if the firm has higher than normal earnings. Convertible preferred stock allows the preferred shareholders to convert their shares to common stock. Adjustable rate preferred has a variable dividend rate that is tied to some benchmark.

A Type of Preferred Stock for Which Any Dividends Missed