Preferred stock that has the right to prior periods' unpaid dividends even if they were not declared is called:
A)Noncumulative preferred stock.
B)Participating preferred stock.
C)Callable preferred stock.
D)Cumulative preferred stock.
E)Convertible preferred stock.

Question

Quizplus · Accepted Answer

Cumulative preferred stock has the right to receive prior periods' unpaid dividends, even if they were not declared. Noncumulative preferred stock only receives dividends if they are declared, while participating preferred stock has the potential for additional dividend payments. Callable preferred stock can be redeemed by the issuer before the maturity date. Convertible preferred stock can be exchanged for a predetermined number of common shares.

Preferred Stock That Has the Right to Prior Periods' Unpaid