Preferred Stock with a Feature Allowing Preferred Stockholders to Share

question 175

Multiple Choice

Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

• A)Cumulative preferred stock.
• B)Callable preferred stock.
• C)Participating preferred stock.
• D)Convertible preferred stock.
• E)Preferential preferred stock.

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Definitions:

Stockholder's Equity

What remains of a corporation's assets after liabilities are accounted for, denoting the interest of owners.

Long Term

Referring to assets, liabilities, or investments expected to last, or commitments expected to be active, for more than one year.

Treasury Bonds

Long-term government bonds issued by the U.S. Department of the Treasury, known for their safety and used by investors to diversify portfolios.

Interest Revenue

Income earned by a company from investments it has made in bonds, loans, or other interest-bearing assets.