Which of the Following Statements Is True Pertaining to Participating

question 119

Multiple Choice

Which of the following statements is true pertaining to participating preferred stock?

• A)Its issuance provides no flexibility to the issuing company because its terms always mandate a regular, annual dividend.
• B)There is a legal requirement for a corporation to declare a regular, annual dividend.
• C)It includes the right to share in dividends in excess of the regular, annual dividend.
• D)It includes the right to participate in management decisions through voting privileges.

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Definitions:

No-Par Share

Stock issued without a specified face value, where the board of directors determines its value.